Who was Siddhartha Bhaiya and what did he caution about?

Siddhartha Bhaiya was the MD of Aequitas and a noted smallcap investor. He cautioned that Indian equities looked like a bubble, led by stretched mid and small-cap valuations, steady SIP inflows, and promoter selling. His call urged investors to focus on quality, protect capital, and be patient with entries when prices run ahead of earnings.

What should retail investors in India do after this warning?

Rebalance exposure to quality names, cap single-stock weights, and avoid chasing momentum. Hold a cash buffer and use staggered buys linked to valuations or earnings. Add small allocations to gold ETFs or liquid funds for stability. Keep a clear exit plan and track earnings revisions, free cash flow, and promoter actions closely.

How can I check if my smallcap holdings are overpriced?

Compare current price-to-earnings and price-to-cash-flow with five-year averages and sector peers. Look for alignment with earnings growth and free cash flow. Watch for red flags like high promoter pledges, insider selling, and equity dilution. If the thesis needs perfect execution to justify price, consider trimming or waiting for better levels.

Will SIP flows keep the market supported despite rich valuations?

SIP flows provide steady demand, but they do not remove valuation risk. If earnings disappoint or liquidity cools, rich segments can still correct. Use SIPs as part of a plan, not a reason to ignore price. Stagger entries, review fund portfolios, and stay flexible with asset mix when market breadth turns weak.

Global Market Insights

January 03: Siddhartha Bhaiya’s Passing and His India Bubble Warning

ByHuzaifa Zahoor January 3, 2026January 3, 2026

Siddhartha Bhaiya, the Aequitas MD, passed away at 47 after a cardiac arrest. Days earlier, siddhartha bhaiya warned that Indian equities were in a bubble, led by stretched mid and small caps and SIP-fuelled froth amid promoter selling. We look at why this view matters, how valuation risk can bite, and practical steps for Indian investors. Our aim is to keep portfolios resilient without panic, and to frame choices on cash, gold ETFs, and entries with discipline.