FIIs Haven't Left India, They've Just Reshuffled Their Bets: Samir Arora

The narrative that foreign institutional investors (FIIs) are abandoning Indian equities is increasingly being challenged by structural data. According to Samir Arora, Founder and Group CIO of Helios Capital Management, what looks like an exodus is actually a sophisticated $200 billion rotation within the Indian market.

The $200 Billion Silent Rotation

At the ET Alpha Wealth Summit, Samir Arora delivered a sharp macro read that contradicts the prevailing bearish sentiment regarding foreign capital in India. While headline FII outflows are estimated at approximately $50 billion (net, including currency impact), a deeper look reveals a massive internal shift.

Citing ICICI report data, Arora highlighted a dramatic change in portfolio composition. Four years ago, a group of heavyweight blue-chip stocks—including HDFC, Reliance, Infosys, TCS, Kotak, Bajaj Finance, and Hindustan Unilever—accounted for roughly 40% of the total FII portfolio in India. Today, that concentration has plummeted to approximately 20%.

In rupee terms, the drawdown from these large-cap giants is estimated at a staggering $150–$200 billion. Crucially, this was not a complete withdrawal; instead, foreign investors simultaneously poured nearly $100 billion into other Indian stocks, creating a parallel accumulation that remains under-reported in headline news.

Growth Over Value: Where the Money is Moving

The data suggests that FIIs are not retreating from India, but are instead pivoting from "value" stocks to "growth" stocks. This rotation is moving away from low price-to-earnings (PE) legacy names and toward high-growth businesses with much higher multiples.

Arora pointed to specific examples where FII stakes have increased significantly:

The valuation shift is evident in the numbers. Based on March 2027 estimates, Eternal trades at a PE multiple of 115x, Polycab at 45x, and HDFC Bank at 37x. Furthermore, midcap names like Max Healthcare and GE Vernova have also seen notable FII accumulation. This indicates a preference for high-multiple growth rather than indiscriminate selling.

Increased Market Breadth and Participation

Quizás la señal más constructiva para la economía india es la creciente profundidad de la participación extranjera. La "amplitud" del mercado —el número de empresas que despiertan interés extranjero— se ha expandido significativamente.

Hace cuatro años, aproximadamente 900 empresas indias poseían al menos una participación del 1% de los FII. Desde entonces, esa cifra ha crecido hasta alcanzar aproximadamente las 1.300 empresas. Esto sugiere que, incluso cuando el capital se retira de los líderes tradicionales, se está extendiendo más profundamente en el ecosistema corporativo indio, llegando a una mayor variedad de sectores y capitalizaciones de mercado.

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