Key Takeaways
- • JM Financial Services' Anuj Kapoor, Managing Director and CEO of Private Wealth, told Fortune India that India's HNI and UHNI investors are not retreating from equities but becoming more selective, favouring companies with strong balance sheets, predictable cash flows and pricing power.
- • Kapoor says incremental capital is moving into private assets, including private equity, private credit, pre-IPO investments, REITs, InvITs and structured products, and recommends limiting pre-IPO exposure to 5-7% of portfolios.
- • He recommends 10-15% international exposure for most HNI and UHNI portfolios, rising to 20-25% for families with overseas liabilities, and 25-35% fixed income and income-oriented allocation for most UHNI portfolios.
- • FPIs have withdrawn roughly ₹3 lakh crore from Indian equities in 2026 so far, nearly double the ₹1.66 lakh crore sold in 2025, while domestic institutions have absorbed a substantial part of the selling.
- • Kapoor warns investors against mistaking higher yields for diversification and urges scrutiny of private credit managers on borrower concentration, collateral, covenants and cash versus accrued income.
Summary
India's wealthy investors are staying in equities but growing more discriminating, according to Anuj Kapoor, Managing Director and CEO of Private Wealth at JM Financial Services Ltd., speaking to Fortune India. "Clients are not retreating from equities. They are becoming more selective on what they own," he said. Indian equity valuations have eased to around 20.5 times trailing earnings, below a five-year median of roughly 22 times, while Nifty 50 profits grew about 18% in the June 2026 quarter. Investors are favouring large-cap financials, select consumption and capital goods companies, while richly valued growth stocks and thinly traded small caps are receiving smaller incremental allocations. With crude oil above $100 a barrel and the rupee in the mid-90s against the dollar, companies with pricing power are also gaining favour. Kapoor characterised the shift as a rebalancing of conviction rather than a move to cash.
Incremental capital is moving towards private assets as elevated public valuations and volatility make returns harder to generate. Investors are building multi-asset portfolios that balance income, downside protection and diversification. Private equity, private credit, pre-IPO investments, REITs, InvITs and structured products, including market-linked debentures, are attracting allocations. Kapoor cautions that alternatives should be funded only with capital that can be locked up for the full tenure. Fixed income has regained appeal following the RBI's October 7 decision to raise the repo rate by 25 basis points to 5.50%, with the 10-year government bond yield around 7.2%. Kapoor favours high-quality short- to medium-duration bonds and accrual strategies and advises against aggressive long-duration exposure. He considers a 25-35% allocation to fixed income and income-oriented strategies reasonable for most UHNI portfolios.
On international exposure, Kapoor recommends 10-15% for most HNI and UHNI portfolios, rising to 20-25% for families with overseas liabilities, children studying abroad or relocation plans. He cites access to sectors underrepresented in India, including artificial intelligence, semiconductors and global healthcare. Investors must assess tax, regulatory and FEMA implications before deploying capital overseas.
Foreign portfolio investors have withdrawn roughly ₹3 lakh crore from Indian equities in 2026 so far, nearly double the ₹1.66 lakh crore sold in 2025. Kapoor attributes the outflows to elevated crude prices following the West Asia conflict, rupee depreciation and higher US Treasury yields. Domestic institutions have absorbed a substantial part of the selling, buying about ₹59,000 crore of equities in October through October 23 against FPI sales of about ₹51,000 crore, and about ₹76,000 crore in September, supported by monthly SIP inflows of nearly ₹25,000 crore. Kapoor flagged large IPO issuances and a possible slowdown in SIP contributions as risks, and said foreign flows should improve once crude and US yields stabilise.
On private credit, Kapoor warned investors against mistaking higher yields for genuine diversification. Managers should be assessed across credit cycles, borrower concentration, collateral security, covenant enforceability and the share of income received in cash. Senior secured and asset-backed lending offer better risk diversification than unsecured lending to stretched borrowers. He recommends limiting pre-IPO investments to 5-7% of portfolios, focusing on mature businesses with proven models and credible exit routes, and notes the illiquidity of closed-ended Category II AIFs. On family offices, Kapoor said they are institutionalising through investment committees, formal investment policies and defined rebalancing rules, while independent risk oversight, consolidated reporting and succession planning still need attention.
Incremental capital is moving towards private assets as elevated public valuations and volatility make returns harder to generate. Investors are building multi-asset portfolios that balance income, downside protection and diversification. Private equity, private credit, pre-IPO investments, REITs, InvITs and structured products, including market-linked debentures, are attracting allocations. Kapoor cautions that alternatives should be funded only with capital that can be locked up for the full tenure. Fixed income has regained appeal following the RBI's October 7 decision to raise the repo rate by 25 basis points to 5.50%, with the 10-year government bond yield around 7.2%. Kapoor favours high-quality short- to medium-duration bonds and accrual strategies and advises against aggressive long-duration exposure. He considers a 25-35% allocation to fixed income and income-oriented strategies reasonable for most UHNI portfolios.
On international exposure, Kapoor recommends 10-15% for most HNI and UHNI portfolios, rising to 20-25% for families with overseas liabilities, children studying abroad or relocation plans. He cites access to sectors underrepresented in India, including artificial intelligence, semiconductors and global healthcare. Investors must assess tax, regulatory and FEMA implications before deploying capital overseas.
Foreign portfolio investors have withdrawn roughly ₹3 lakh crore from Indian equities in 2026 so far, nearly double the ₹1.66 lakh crore sold in 2025. Kapoor attributes the outflows to elevated crude prices following the West Asia conflict, rupee depreciation and higher US Treasury yields. Domestic institutions have absorbed a substantial part of the selling, buying about ₹59,000 crore of equities in October through October 23 against FPI sales of about ₹51,000 crore, and about ₹76,000 crore in September, supported by monthly SIP inflows of nearly ₹25,000 crore. Kapoor flagged large IPO issuances and a possible slowdown in SIP contributions as risks, and said foreign flows should improve once crude and US yields stabilise.
On private credit, Kapoor warned investors against mistaking higher yields for genuine diversification. Managers should be assessed across credit cycles, borrower concentration, collateral security, covenant enforceability and the share of income received in cash. Senior secured and asset-backed lending offer better risk diversification than unsecured lending to stretched borrowers. He recommends limiting pre-IPO investments to 5-7% of portfolios, focusing on mature businesses with proven models and credible exit routes, and notes the illiquidity of closed-ended Category II AIFs. On family offices, Kapoor said they are institutionalising through investment committees, formal investment policies and defined rebalancing rules, while independent risk oversight, consolidated reporting and succession planning still need attention.
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