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India's attractiveness increased lately with recovery in GDP: Kunal Vora

India's attractiveness increased lately with recovery in GDP: Kunal Vora

The situation on tariffs is still evolving, but India is relatively well placed due to its low merchandise export dependence
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Sundar Sethuraman Mumbai
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With US trade tariffs adding complexity, India's continued recovery in gross domestic product (GDP) growth and a recovery in earnings positions it favourably when compared with other global peers, says Kunal Vora, head of India Equity Research at BNP Paribas Bank. In an email interview with Sundar Sethuraman, Vora delves into the evolving landscape of foreign portfolio investor (FPI) flows into India, which until recently faced severe selling pressure due to high valuations and global uncertainties. Edited excerpts:
FPI outflows have moderated. What's the outlook for foreign flows?
India has been a well-liked market by the FPIs. India has received

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When homegrown capital outgrows foreign funds: Can India fund its own growth?
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Their stake has steadily declined due to outflows driven by global monetary tightening, rising interest rates in the West, and geopolitical volatility. In contrast, DIIs, including mutual funds, insurance companies, pension funds, and banks, have more than doubled their share since 2020, when they owned just 13.58 % of listed companies. A significant catalyst behind this rise has been the surge in mutual fund investments. Assets under management (AUM) of Indian mutual funds crossed ₹60 lakh crore in December 2025, up from ₹22 lakh crore in 2020, according to AMFI (Association of Mutual Funds in India). In fact, total amount collected through SIP during March 2025 was ₹ 25,926 crore, highlighting a broad-based retail revolution fuelling DII inflows. 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Also Read: Gold, stocks and FPIs: What the market crystal ball foretells for the next three months India turns inward This behavioral shift is a sign of market maturity challenging the long-standing narrative that Indian equities depend on foreign flows to sustain momentum. The new reality is that Indian markets now have a large, committed domestic base that believes in India's long-term fundamentals. This growing domestic ownership has consequences beyond market stability. DIIs now have a stronger say in corporate governance. They are increasingly pushing for transparency, ESG adoption, better board practices, and responsible capital allocation. Institutional activism—once seen only among global investors —is slowly but surely taking root among Indian institutions as well. But influence must be wielded responsibly. They must vote thoughtfully on key resolutions, prevent value destruction, and ensure companies stay aligned with broader shareholder interests. 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Indian equities' outlook now neutral due to stellar show despite global headwinds: SBI report
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FPI Tracker: Telecom, services, capital goods corner major chunk of inflows; IT, healthcare face heavy selling in May
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time10 hours ago

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FPI Tracker: Telecom, services, capital goods corner major chunk of inflows; IT, healthcare face heavy selling in May

Foreign portfolio investors (FPIs) remained net buyers in the Indian stock market in May, infusing ₹ 19,863 crore across sectors. According to data from the National Securities Depository Limited (NSDL), this marked the highest monthly FPI inflow since September 2024. However, the investment pattern reveals a stark divergence in sentiment, with selective sectors attracting heavy inflows while others faced sharp sell-offs. The telecommunication sector emerged as the biggest beneficiary of FPI inflows, drawing ₹ 8,089 crore in net inflows during the month — a sharp jump from the ₹ 1,037 crore invested between May 1 and 15 to ₹ 7,052 crore in the latter half of the month. The services sector also saw robust inflows worth ₹ 7,972 crore, with FPIs increasing their exposure substantially in the second half of the month ( ₹ 6,210 crore vs ₹ 1,762 crore in the first half), NSDL data showed. Capital goods continued to attract consistent foreign capital, receiving ₹ 5,327 crore in May. This aligns with the broader capex revival theme and ongoing infrastructure push by the government. The financial services sector witnessed ₹ 4,028 crore in net inflows despite some profit booking in the second half. FPIs bought financial stock worth ₹ 4,728 crore during May 1 to 15, followed by selling worth 700 crore during May 16 to 31. In contrast, the Information Technology (IT) sector witnessed significant FPI selling to the tune of ₹ 2,436 crore. The sector saw net inflows of ₹ 289 crore in early May, but this reversed sharply with ₹ 2,725 crore worth of selling in the latter half. Healthcare sector also bore the brunt of FPI outflows, with ₹ 2,614 crore exiting the sector. FPI selling in the sector amounted to ₹ 606 crore in the first fortnight of May, which accelerated to ₹ 2,008 crore during the second half of the month. The power sector saw net FPI outflows worth ₹ 2,494 crore, with ₹ 720 crore selling in the first half and ₹ 1,774 crore selling in the second half. Consumer durables with ₹ 1,734 crore selling, and Realty sector with ₹ 1,664 crore selling, also witnessed sustained outflows during the month of May. Fast-moving consumer goods (FMCG) saw a sharp reversal in sentiment — from net outflows of ₹ 1,057 crore in the first half to a strong inflow of ₹ 1,872 crore in the second half — taking the monthly total to ₹ 815 crore. Automobile and auto components saw marginal net inflows of ₹ 101 crore, with mixed flows during the month. Construction and construction materials also posted modest inflows of ₹ 267 crore and ₹ 575 crore respectively. The sharply divergent flows highlight that investors are becoming more selective, favouring sectors aligned with structural growth themes like telecom, services, capital goods, and financials, while trimming exposure in defensives or globally exposed sectors like IT and healthcare. Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.

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