Kotak: Stock Market Faces "Selling Tsunami" from High Valuations, Supply Surge

• Kotak Institutional Equities warns of a "tsunami of selling" in the Indian share market due to high valuations and a surge in share supply.
• Nifty's P/E ratio, despite falling to 17.8X in 2025, remains in a "comfortable but high band," prompting large investors to book profits.
• A massive increase in share supply is noted from promoters (~$40B in CY23-25), aggressive exits by PE/VC funds, and significant IPO/QIPs ($25B in 2025) with high OFS components.
• Government and institutions are also contributing to the supply by selling shares, with the government selling ~$3.4 billion in FY2024-FY2026.
• Investors are advised to exercise caution, adopt a stage-by-stage strategy during dips, and continue SIPs, as DII inflows remain strong.

Why It Matters: Kotak warns of sustained stock market selling due to high valuations and massive share supply.