‘This too shall pass’: Prashant Jain’s case for staying invested and where he Is putting money now – News Air Insight

Amid the noise of FII outflows, West Asia conflict fears, and rising oil prices, one of India’s most seasoned fund managers is staying calm — and staying invested. Prashant Jain, CIO of 3P Investment Managers and a 35-year market veteran, has titled his latest investor note “This Too Shall Pass.” In a detailed conversation with ET Now, he laid out why he believes the current panic is both temporary and manageable — and exactly where he is building positions.

Why India’s oil shock is smaller than it looks

Jain’s first argument is one of structural resilience. India’s oil imports have fallen to roughly 3% of GDP — a meaningfully lower level than in past crises. Even if crude averages $110 for an extended period, he calculates the current account deficit moving from around 1% to perhaps 2% of GDP — uncomfortable, but far from catastrophic. Fiscal consolidation over recent years has also created a buffer on the government’s side. His historical reference point is striking: between 2000 and 2008, oil rose five times from $25 to $140 — and India still delivered 7% GDP growth throughout.

“Even when oil went up 5x, India still grew at a fairly decent pace. That is representative of the resilience of India,” says Jain.

Domestic flows are the underappreciated buffer

While most market commentary fixates on FII selling as the primary risk, Jain points to a counterweight that he believes is being overlooked. The primary market — IPOs and fresh issuances — has dried up sharply after retail investors lost money on roughly two out of every three issuances over the past 18 months. With primary markets unlikely to absorb domestic capital for some time, he argues that SIP flows and retail money will be redirected into secondary markets, providing meaningful structural support. Whenever FII selling moderates or stabilises, that domestically supplied bid should become increasingly visible.

Where Jain is building his portfolio

His portfolio positioning has had a deliberate largecap tilt for the past 18 months, and that conviction has only deepened. At 17.5x one-year forward earnings, he believes Nifty now offers room for multiple expansion once stability returns — something he says has not been arguable for several years. His preferred sectors span a wide but coherent range:

On IT: not a clear picture — but not a sell either

Jain is candid that IT is not a straightforward call. The real question, he says, is not whether AI causes deflation in tech services — it will — but whether enterprise IT spending accelerates enough to offset that deflationary pressure. His tentative view is that FY27 should be better than FY26, and at current valuations, he would not recommend underweighting the sector for benchmark-sensitive investors.

Finally, Jain’s message is disciplined optimism: India can absorb the oil shock, domestic flows will cushion FII exits, and Nifty at 17.5x forward earnings is no longer expensive. His playbook — stay in largecaps, favour large banks, deploy gradually — is built for investors who can look past the next few quarters of noise.