Reliance Power's IPO arrived in January 2008 with record oversubscription. It was the top of the market. The same month, the Nifty fell about 10% in a single day — India was cracking months before the rest of the world. Reliance Power, one of the most successful IPOs in history, would later trade below ₹5, becoming one of the worst investments.

The episode became the canonical warning that IPO frenzy marks cyclical tops — a signal traders have replayed mentally through every boom since.

Lehman Brothers was allowed to fail, and the global financial system froze. India — already falling since January — went into freefall: the Nifty slid from near 6,000 to an intraday low of about 2,252 in March 2009, a decline of roughly 50%. During the collapse the index hit its lower circuit — the only occasion it had limit-downed until 2020.

Even the record FII outflows of this era would later be dwarfed by those of 2022 and 2024. Lehman is the benchmark: every crash since has been measured against the day the Nifty lost half its value.

The market bottomed on 9 March 2009 with the Nifty closing near 2,500. Then, helped by the US Federal Reserve's zero rates and quantitative easing, the index rallied more than 100% within 12–15 months, climbing back above 6,000.

It was the fastest doubling in Indian market history up to that point — matched only by the 2020–21 run — and it became the template for every 'deep crash → full rebound' story that followed.

Everyone expected a hung parliament after the 2009 election. Instead the Congress-led UPA won a majority — without communist support — a positive surprise. Counting fell on a Saturday; traders could not react until Monday, when SGX Nifty futures opened roughly 20% higher.

At the 10 am open the Nifty hit its 10% upper circuit within seconds, trading halted for an hour, and on reopening the index rose another 10% — a combined 20% in a single day, the biggest single-session gain in Indian market history. Short sellers were destroyed; one trader turned ₹2 lakh of deep out-of-the-money calls into ₹2 crore. The gap-up would not be filled until COVID in 2020.