S. Naren, CIO of ICICI Prudential, is increasing exposure to large-cap stocks, highlighting valuation challenges rather than macroeconomic concerns. Despite looming US tariffs, he remains cautiously optimistic, advocating for a balanced investment strategy.
Overseeing more than $100 billion in assets, Naren told Bloomberg News, “India doesn’t have a macro problem—it has a valuation problem.” He believes the Indian equity market is fundamentally sound but faces inflated valuations.
Naren cautioned investors against taking excessive risks by overloading on equities. Instead, he recommends a prudent, balanced portfolio approach. He noted that while Indian stocks are less “irrational” than six months ago, they are still not compelling buys.
Highlighting large-cap stability, Naren pointed out that the Nifty 50 has remained relatively flat this year, in contrast to the Nifty Smallcap 250 Index, which has dropped by 14%.
On key risks, Naren flagged climate change, US tariffs, geopolitical tensions, and AI advancements as factors that could impact global equities. He stressed the need for selective and cautious exposure to large-caps.
March saw the Nifty reclaim the 23,500 level, with some experts predicting further upside, driven by revived foreign inflows. Key indices are on track to break their streak of monthly losses.
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