India’s markets clock tenth straight gain in 2025 even as smallcaps underperformed: HDFC AMC's Navneet Munot

markets

• Indian equities posted a 10th straight year of gains, despite small caps lagging
• Investor behavior shifts toward job creation, family offices, and SIP options
• India balances global ties, focuses on middle class and reducing inflation

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Indian markets entered 2025 with resilience, said Navneet Munot, MD and CEO of HDFC AMC Ltd while reminiscing about the market performance in the last 12 months. In a year-end note, he wrote that Indian equities “played maiden overs, yet 10th consecutive inning (year) of positive score,” even as “tail-enders (small caps) underperformed.” With “relative valuations, competitive rupee, steady macro and earnings revival,” he said the backdrop offered “a better pitch now.”

Munot noted changing investor behaviour, writing that investors applied an “Eternal Growwth Lens,” while “CollegeWallahs chase seed money rather than corporate seats.” He highlighted the shift “from job seekers to job creators,” the rise of family offices, hopes that “millions write the Zoho code for inclusive growth,” SEBI “tames tainted trainers,” SIP options helping investors create better futures, and an “Atmanirbhar Capital market.” His warning remained clear: “Sports betting in India, don’t Dream!”

On policy, he wrote that the “middle-class gets higher attention with lower taxes.” India’s inflation, he said, was at the “lower band” even as affordability anger simmered globally. “Bond traders aren’t budging much but credit counters cruising better,” he added, with foreigners “bidding a biteful of Indian lenders.”

Turning to geopolitics, Munot said the India–US strategic mission was “deeply shadowed by episodic transactionalism.” An FTA, he wrote, must reflect “mutual interest and shared principles,” adding that with “50% tariffs, H1-B motion or insinuations,” India “won’t write blanket ‘American options’.” Steeped in strategic autonomy, India, he said, was balancing Russia, China and the US “with composure,” while “Labouring on the reform codes, a Nuclear SHANTI and Maritime renaissance — Thus spake Chanakya.”

He pointed to political and civic moments: “BJP Rakes in Delhi. Bihar, Daswi Baar, Nitish Kumar,” the RSS centennial, the Vande Mataram sesquicentennial, and the Mahakumbh, which he described as “a monumental feat than Mission Impossible.” He wrote that “Vyomika and Sofia touched the nation’s heartbeat,” Dhar’s Dhurandhar “fired like Brahmos,” and the “roar of Operation Sindoor” echoed resolve.

Munot also cited setbacks and progress: “AI’s Dreamliner turned nightmare in Ahmedabad,” demand for more colours than Indigo, ISRO’s Shubhanshu “defies gravity with gravitas,” and Andhra Pradesh CM steering a Google data centre while stirring competitive federalism. India, he added, “shines with three cricket crowns,” with the women’s team journey “from heartbreaks to Heart Lamp of victory.”

Global scenario

Munot called 2025 a “tango of ‘Tension and Transformation’,” writing of agentic AI “blurring the boundaries between human intent and silicon execution,” sanctions turning to actions, weaponised finance, precious metals dazzling, sharp crypto swings and growing fragmentation.

He cited conflicts across regions, political shifts, declining fertility, China’s surplus and deflation pressures, strong global markets, bond vigilantes and central banks walking a tightrope. He wrote that renewable power surpassed coal, alongside advances in solid-state storage, perovskite cells, fusion glimpses, floating wind, geothermal drilling and green hydrogen.