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

Perhaps the most constructive sign for the Indian economy is the increasing depth of foreign participation. The "breadth" of the market—the number of companies receiving foreign interest—has expanded significantly.

Four years ago, approximately 900 Indian companies held at least a 1% FII stake. That number has since grown to roughly 1,300 companies. This suggests that even as capital retreats from the traditional frontliners, it is spreading deeper into the Indian corporate ecosystem, reaching a wider variety of sectors and market caps.

Key Takeaways