Raamdeo Agrawal’s portfolio is down 17–18% — and he says this is not the time to panic – News Air Insight

MOFSL Chairman and co-founder Raamdeo Agrawal says he has no cash left to deploy — he invested his last dividend payout just last week. His message to investors: survive this storm first, because the Nifty at below 20 PE is beginning to look genuinely attractive.

Why this crisis is harder to read than Covid

Agrawal has navigated every major Indian market crisis of the last four decades — from the 1992 Harshad Mehta collapse that saw the Sensex halve in a month, through Y2K, the 2008 global financial crisis, and Covid. Each had a defining character. Covid, he argues, was brutal but legible: one problem, one direction, one solution pathway. Markets fell 33%, then recovered relentlessly as vaccines arrived.

The West Asia conflict is fundamentally different in his view because of its unpredictability. Every morning brings a new headline — ceasefire signals one day, escalation threats the next. Iran has publicly stated readiness to sustain the conflict for six months. That oscillation between hope and alarm is what makes it so corrosive for markets. “Someday you feel the problem is resolved, someday you feel again the problem is very serious,” he said.

The cascading cost problem no one is fully pricing in

What makes Agrawal particularly alert to this crisis is not the oil price itself but what follows it. The threat of a Strait of Hormuz closure — even a partial or intermittent one — sends energy costs higher across the board. And energy is embedded in everything: raw materials, packaging, logistics, insurance, electricity. Each link in the supply chain reprices upward, feeding into inflation, which then triggers monetary policy responses. The longer the conflict lasts, the deeper those second and third-order effects cut into corporate earnings.

India’s resilience is real — but retail portfolios are hurting badly

Agrawal is candid about his own position. His personal portfolio — diversified across direct equities, mutual funds, and private equity — is down 17 to 18%. He notes this is roughly in line with the broader market. For retail investors concentrated in smallcaps or mid-caps, or holding just one or two stocks, the damage could be 30 to 40%.

Yet he contextualises this against India’s dramatically improved macro resilience. In 1992, India had $5–6 billion in forex reserves. Today it sits at approximately $700 billion. GDP has grown from $250 billion to a $4 trillion economy. Settlement systems, margin frameworks, and market infrastructure are incomparably more robust. Against this backdrop, he expects the current correction to be shallower than Covid’s 33% peak-to-trough decline. At 15–17% down already, he believes the bulk of the damage may already be done — though he is careful not to rule out further downside.

Valuations are the silver lining

The clearest positive signal Agrawal points to is valuation. The Nifty is now trading below 20 times earnings — a level that, in normal times, would attract significant institutional and retail buying. His research team has not yet made deep cuts to next year’s earnings forecasts. Even in a stress scenario where earnings growth slows from 10% to 5–6%, the one-year forward PE sits around 18 times. That is not a market pricing in an earnings collapse. That is a market pricing in fear.

The promoter’s lesson — and why survival comes first

Agrawal closes with a structural observation that has guided him for four decades. Promoters — who own 50 to 60% of their companies — cannot sell. They have no choice but to sit through every crash and participate fully in every recovery. That enforced patience is why they capture the full compounding journey from trough to peak. Public investors who can sell often do so at exactly the wrong moment.

His advice distils to three words: survive, then invest. The Nifty has gone from 100 to roughly 80,000 over his investing lifetime. Every crisis looked terminal while it was happening. None of them were.