Bulls Are Gone. Now What?

THE TAKE

India’s Longest Market Slump in 30 Years Is Reshaping Investor Confidence

India’s stock markets are now in their longest slump in nearly 30 years, wiping out nearly $1 trillion in market capitalisation.

A significant part of this decline is driven by consistent Foreign Institutional Investor (FII) selling, which has already touched $16.5 billion in 2025, including several billion dollars in March alone.

Some of this might seem surprising, given that the decline has been slow and steady—whereas it is usually sudden crashes or sharp rallies that grab attention and are easier to recall.

However, a gradual but persistent decline can do more to erode consumer confidence, according to a comprehensive report by Reuters.

The slump, the mounting losses, and the hit to retail investors are now denting consumer spending and threatening to further slow growth in the world’s fifth-largest economy, the report notes.

Moreover, there is no clear horizon for a recovery, thanks in part to uncertainty surrounding Trump’s policies.

Indian markets are grappling with two sets of challenges—internal and external.

While analysts are cautiously predicting a recovery in the second quarter of next year, roughly six months from now, there is little clarity on how Trump’s tariff rhetoric will evolve or how it will impact businesses and trade dynamics.

The Stock Market Boom That Turned Into A Debt Trap

The NSE Nifty 50 and BSE Sensex indices have fallen around 14% since their September peak, while the broader indices, including small- and mid-cap stocks, have dropped over 20%, officially confirming a bear market last month.

A Reuters report highlights the story of a young investor, one of nearly 100 million new traders who entered the stock market via low-cost trading platforms during the post-pandemic boom.

Their trading was supplemented—as we have seen—by a constant drip of smart-alecky advice on social media, often from stockbrokers or influencers running these trading apps.

With a four-year cycle to reflect on, short memories, and greed fueling decisions, the name of the game became feeding tantalising stock tidbits and investment tips.

And, obviously, it worked. Until it didn’t.

The investor in question put his 100,000-rupee ($1,150) savings into equities in January 2024. By August, he had doubled his money, which encouraged him to borrow funds for riskier options trading.

When markets tumbled, he suffered losses and borrowed more, hoping for a rebound—only to end up trapped in debt.

"The thing with options trading is that the gains are massive, but I was underprepared to face the loss," he admitted.

Now, he and his family have cut their spending to a bare minimum, trying to recover from the financial hit.

Dozens of retail investors Reuters spoke to in major Indian cities said they were now considering pausing or reducing their spending, including pulling back from stock market investments in the near term.

Another investor, interviewed by Reuters, is now delaying plans to buy a house after the market downturn wiped out roughly 14% (nearly Rs 20 lakhs) from his portfolio’s peak value.

In the NSE 500 universe—which includes a mix of large-, mid-, and small-cap stocks—companies where retail shareholders hold over 20% have dropped 45% from their 52-week highs, according to Bloomberg data.

Meanwhile, stocks where domestic institutional investors (DIIs) hold more than 20% have fallen by 34%, while those with similar stakes held by global funds have declined 29%.

The Nifty 50 and Sensex, as we noted earlier, have fallen around 14.3% and 13.6%, respectively, from their previous peaks.

Since 26 September last year, the market capitalisation (mcap) of stocks in which retail investors hold more than 20% has fallen 26.6%, while those held by DIIs and foreign portfolio investors (FPIs) have declined 15.1% and 15.2%, respectively, according to data compiled by Business Standard.

The Reality Check for Investors

All of this, quite clearly, reinforces the dangers of treating markets as a quick-money playground.

The temptation to read a social media post from a self-proclaimed expert, then switch to a trading app on the same mobile phone to buy stocks—or worse, derivatives—is a dangerous game. And now, it is unravelling.

The markets will undoubtedly perform well over the long term, offering good returns—especially in an economic environment where inflation continues to erode slow-rising incomes.

But this calls for patience.

It also demands the discipline to tune out the daily flood of trading advice and instead build a long-term investment strategy.

23.71 Million Tonnes

This is India’s sugar production so far in the 2024-25 season, a sharp 16.13% decline from last year, according to the National Federation of Cooperative Sugar Factories Limited. Despite being one of the world's largest sugar producers, India has faced low production for the last few years. The fall is due to pest infestations in Uttar Pradesh, premature flowering in Maharashtra and Karnataka, and an abnormally short crushing season—Maharashtra’s mills operated just 83 days instead of 140-150. The government had initially projected 33.3 million tonnes, even permitting exports, but now faces a supply crunch. Total sugar output is now expected to be lower at 25.9 million tonnes, down from 31.9 million tonnes last season, NFCSF said.

—⚖️ More Trouble for Ola! A subsidiary of Ola Electric is facing two separate insolvency petitions, as reported by Bloomberg. Rosmerta Digital Services and Rosmerta Safety Systems, both key vendors for Ola’s vehicle registration services, have moved National Company Law Tribunal Bengaluru over unpaid dues exceeding Rs 24 crore ($2.9 million). Ironically, this is the same company Ola was “renegotiating” contracts with, allegedly delaying vehicle registrations and deliveries, as reported by Mint. The crisis worsens as Ola slashed 1,000 jobs, deals with showroom shutdowns, and battles a stock price collapse — down 65% from its IPO peak.

—🚗 BluSmart Up for Grabs? Uber is in early talks to acquire BluSmart, the Gurugram-based electric cab service, The Economic Times reported. This move could expand Uber’s EV fleet in India, but it comes at a time when BluSmart’s key backer, Gensol Engineering, is battling financial distress. Gensol, which owns BluSmart’s electric vehicles and leases them to the ride-hailing firm, is facing liquidity issues and a credit rating downgrade. Uber is reportedly assessing BluSmart’s fleet and operations, though BluSmart has denied any ongoing acquisition discussions. 

—🔎 Govt Raids On E-commerce. Last week, the Bureau of Indian Standards (BIS), raided Amazon and Flipkart warehouses in Lucknow, and seized unsafe and non-certifiable products, as reported by Mint. The BIS seized products like water bottles, heaters, and food mixers from brands including Digismart, Activa, Inalsa, Cello Swift, and Butterfly. Offenders face penalties of at least Rs 2 lakh, and in severe cases, imprisonment of up to two years, under Section 17 of the BIS Act. Though Amazon denied any wrongdoing, BIS says its raids of e-commerce companies will continue.

—💊 Meds Out of Market! Sun Pharma and Zydus Pharmaceuticals are recalling products in the US market due to manufacturing issues, as per a recent U.S. Food and Drug Administration disclosure, The Economic Times reported. Sun Pharma is recalling Morphine Sulfate tablets for failed dissolution specifications, while Zydus is recalling Nelarabine injection on detection of impurities. Indian pharmaceutical companies form a substantial portion of the drug market in the US, and this recall comes in light of Trump’s ongoing tariff war with its traditional trade partners, including India.

👥 THE TEAM

✍️ Zinal Dedhia, Salman SH | ✂️ Rohini Chatterji | 🎧 Joshua Thomas