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

インド経済にとって、おそらく最も前向きな兆候は、海外投資家の参加が深化していることです。市場の「広がり」、つまり海外投資家から関心を集める企業の数は、大幅に拡大しています。

4年前、少なくとも1%のFII（外国機関投資家）の持ち分を持つインド企業は約900社でした。その数はその後、約1,300社にまで増加しています。これは、資本が従来の主力銘柄から引き揚げられている一方で、より幅広いセクターや時価総額へと広がり、インドの企業エコシステムにより深く浸透していることを示唆しています。

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