'Reasonable valuation must to sustain IPO boom'

Sankaran Naren, ED and CIO, ICICI Prudential Mutual Fund, says that if there is correction in global markets, particularly the US, Indian equities are expected to do relatively better in 2026.

- SANKARAN NAREN, ED & CIO, ICICI PRUDENTIAL MUTUAL FUND

Naren tells Joydeep Ghosh that if initial public offerings (IPO) are well-priced, the boom would continue. Excerpts:Many brokerages have predicted that 2026 will be a year when the Sensex crosses 100,000 points and the Nifty around 29,000. Is this is achievable? From a macroeconomic perspective, India is in a very good shape. In 2025, three important developments-income tax cuts, GST reduction, and a significant drop in interest rates-provided meaningful support. They have created a supportive environment for growth going into 2026.

From a market standpoint, the relative positioning has also improved. At the start of 2025, India was relatively more expensive than its global peers. Since then, the global markets have performed much better. As a result, on a relative valuation basis, Indian equities today are cheaper than earlier. However, their trajectory will also depend on global developments, particularly the US market, which is currently very expensive. If global markets remain stable, Indian equities can have a good year. If there is a global correction led by the US, India is likely to outperform on a relative basis.