Special Situation Investing: Making The Most Of Challenging Opportunities

Over the years, the Indian stock market has grown and evolved into a mature market.

This transformation is attributed to several factors, including the improvement of corporate governance, rising transparency within Indian companies, and the increased participation of institutional investors like mutual funds, pension funds, etc. The phenomenon of globalisation has further intertwined India with the global economy, drawing in foreign investors that have significantly contributed to the evolution of the Indian markets.

Moreover, the historical trend in developed markets suggests that as the market matures, it introduces the challenge of identifying distinct opportunities in equity markets, making it difficult to generate higher returns or alpha as compared to the broader markets. This occurs because, as markets expand and mature, they inherently become more efficient. This means stock prices reflect available information more accurately, posing a challenge for investors, particularly retail ones, to identify mispriced securities and gain a competitive edge.