Pankaj Tibrewal, founder and CIO of IKIGAI Asset Manager, has identified a significant split in Indian equities, with the market operating as two separate markets under one index. According to reports from CNBC TV18, Tibrewal believes the market has moved into a phase where valuation discipline, not momentum, should guide portfolio decisions over the next few years. He warned that investors chasing growth stocks at any price may have to pay for it later, as the market has moved away from focusing on sound balance sheet and cash flow conversions. "It's time for some kind of introspection now... people are ignoring the basic hygiene again, which is sound balance sheet and cash flow conversions. People are chasing growth at any cost, which to me always is a risky path," Tibrewal said. He noted that growth stocks with visible momentum are being bid up, while companies with slower growth but comfortable valuations are being ignored, with this split showing up across market capitalisations and sectors.
Tibrewal has flagged rising risks in the IPO market, where he noted that the quality of new listings has declined even as demand stays high. As reported by CNBC TV18, he pointed to governance gaps such as independent directors who have no experience on other boards, and many recent IPO candidates showing strong revenue growth but weaker cash conversion. He emphasized that the quality of new names over the last few months is coming down significantly, with many strong businesses delivering close to zero returns over the past four to five years despite intact franchises. "The quality of the names over the last few months is coming down," he said, adding that predictable growth returning to these names could trigger a sharp bounce back.
IKIGAI Asset Manager has organized its portfolio into four themes with the first covering domestic demand in healthcare, financials and premium consumption, where the fund has increased exposure to private sector financials. According to the report, the second theme focuses on order-book-driven sectors like defence, power and capital goods, where valuations have run ahead of fundamentals, prompting the fund to book some profits. The third theme targets export-linked businesses gaining from rupee depreciation against the yuan, including textiles, garmenting, chemicals and pharma contract manufacturing. The fourth theme covers financialisation, covering wealth managers, asset managers and exchanges. As of August 31, 2026, IKIGAI Asset Manager managed funds worth ₹102.64 crore. The fund has increased exposure to private sector financials in the first theme, while the second theme focuses on sectors where valuations have run ahead of fundamentals.
Tibrewal expects a rerating in beaten-down stocks if earnings growth returns, pointing to sectors such as textiles and chemicals that stand to benefit from currency depreciation and export competitiveness over the coming years. As reported by CNBC TV18, he believes his approach has held through multiple market cycles over the past two and a half decades, and that companies without strong cash flow and governance records deserve caution regardless of near-term price moves. He compared the current market mood to a scene from the film Deewaar, where the growth camp claims valuation, narrative and growth on its side, and the value camp claims wealth creation. "Mere paas valuation hai, mere paas narrative hai, mere paas growth hai... mere paas wealth creation hai," Tibrewal said, arguing that long-term wealth creation comes from avoiding mistakes rather than chasing short-term returns.
