India’s stock market may be closer to a downturn than many investors expect, according to Shankar Sharma, founder of GQuant Investec. Sharma, who was speaking at the Moneycontrol Global Wealth Summit 2025 in Mumbai, delivered a cautionary outlook, stating, "Indian bulls have a five-year shelf life."
While India has enjoyed strong market performance in recent years, he warned that momentum could soon slow, bringing the prospect of stagnation or decline.
Sharma pointed to the recent rally in Indian equities, particularly small-cap stocks, and suggested that the market may be running on borrowed time. "If the bull has run very fast, like in the case of our small-caps, that bull is a tired bull which falls at the slightest of trouble," he said.
He predicted that the Nifty 50 index could deliver zero returns over the next four to five years from its September 2024 highs.
His views contrasted with other analysts' bullish long-term expectations, but Sharma remained firm, arguing that volatility will rise and that while short-term rallies may occur, they will likely be deceptive.
Beyond domestic factors, Sharma highlighted global risks that could weigh on Indian markets. He pointed to concerns over US fiscal policy, trade tensions, and debt sustainability. "I tried to sell everything I could in July 2024, when markets recorded strong gains. However, I got stuck with some investments," he admitted. "I am hoping for a bull market in 2030."
His concerns align with broader anxieties about India's high market valuations. While recent years have seen significant growth, some experts believe current valuation levels pose a risk to sustained future gains.
Ventura Securities echoed Sharma’s caution, warning that the reversal of US trade policies, spending cutbacks, and a growing fiscal deficit could lead to significant market disruptions. The firm noted that the US national debt now stands at $34.6 trillion—120% of its GDP—and rising interest rates could create a financial squeeze.
Drawing parallels to Japan’s debt crisis in the late 20th century, Ventura warned that if US GDP growth slows below Federal Reserve interest rates, the resulting debt burden could force investors to reprice equities, triggering potential market corrections worldwide.
Ventura Securities laid out possible outcomes for Nifty valuations based on past market crashes. Using forward P/E ratios from the Global Financial Crisis (2008) and the Covid crash (2020), the brokerage predicted that Nifty could drop to 20,510 in a moderate downturn, while in an extreme bear case, it could sink to 14,357—mirroring the 2008 crisis.