Indian equities could be approaching the end of their prolonged underperformance, creating an attractive entry point for investors willing to look beyond near-term volatility, according to Prashant Jain, one of India’s best-known fund managers.
In his September 2026 quarterly letter for 3P Investment Managers, Jain says Indian markets could deliver 40-50% returns over the next three years, with downside likely to be limited to the short term. He expects the latest episode of foreign institutional investor (FII) selling to subside by mid-December, allowing markets to absorb the pressure and begin a sustained recovery.
The next few weeks or months could therefore offer an attractive opportunity to enter the market, the letter says.
The call comes after a difficult two-year stretch for Indian equities. The Nifty fell 12.4% between September 2024 and September 2026, while foreign investors sold a net $58 billion of Indian equities over the period. Yet the economy continued to grow at about 7.5% annually in FY25 and FY26, according to the letter.
For Jain, the divergence between economic performance and stock-market returns is central to the opportunity.