A global AI selloff could send money India's way, says Uday Kotak

India could emerge as a beneficiary of foreign flows, if the global artificial intelligence investment boom unwinds, as investors seek markets offering more attractive valuations, Uday Kotak, Asia’s richest banker, said.

“The kind of leverage which global companies are taking to fund their AI aspiration is also leading to significant overvaluation in many cases,” the billionaire founder of Kotak Mahindra Bank Ltd., said in a virtual address ahead of India’s Diwali festival. “And India, as it works down the path of building its own AI capability, will also benefit for reverse flow, should it happen.”

Indian equities have rebounded nearly 10% from this year’s lows in early October, coinciding with a selloff in global AI-linked stocks. Tech-heavy Asian markets have fallen more than 7% over the same period, highlighting India’s relative resilience.


Despite the recent reversal, local stocks are still among the worst performing in the region. The lack of meaningful AI plays, expensive valuations and surging energy prices have seen global investors pull out a record $29 billion from Indian markets in 2026.

Kotak, whose net worth stands at $16.5 billion, said Indian equities have held up despite geopolitical uncertainties, volatile global markets and significant foreign investor outflows, with domestic investors continuing to show confidence.

India’s relative valuation position has also improved following the market correction, making stocks less expensive compared with other markets than they were six to 12 months ago, he said. The country’s higher growth potential remains a key advantage, he added.

The benchmark Nifty 50 Index trades at 17.5 times estimated 12-month forward earnings, down from 21 times at the start of the year. It still commands a sizable premium to regional peers, with the MSCI Asia Pacific Index trading at about 10 times.

For investors, Kotak advocated a medium-term approach focused on quality companies and risk management rather than short-term investment decisions.