ET Alpha Wealth Summit | FIIs haven't abandoned India, they've just reshuffled: Samir Arora

Foreign institutional investors have not walked away from Indian equities, they've simply rotated their bets, Samir Arora, Founder and Group CIO of Helios Capital Management, said at the ET Alpha Wealth Summit, delivering one of the sharpest macro reads on India's market narrative in recent months.

The $200 billion rotation nobody is talking about

Citing data from an ICICI report, Arora revealed a striking structural shift in foreign portfolio behaviour. Four years ago, heavyweight names, HDFC, Reliance, Infosys, TCS, Kotak, Bajaj Finance, and Hindustan Unilever, collectively made up around 40% of the total foreign institutional investor (FII) portfolio in India. Today, that share has nearly halved to roughly 20%.

In rupee terms, the math is staggering. While headline FII outflows from India stand at approximately $50 billion (net, inclusive of currency impact), the drawdown from just these large-cap blue chips amounts to an estimated $150–200 billion. The implication? Foreign investors simultaneously poured around $100 billion into other Indian stocks, a quiet, under-reported accumulation running parallel to the headline selling.


"Even foreigners have not completely left India," Arora noted plainly, pushing back against the prevailing bearish narrative.

Where FIIs are actually buying

The rotation reveals a clear pattern, and it isn't cheap stocks. According to Arora, the top three names where FIIs increased their stakes are Eternal (stake up from 10% to 20%), HDFC Bank (10% to 15%), and Polycab (5% to 12%). As of March 2027 estimates, these three trade at price-to-earnings multiples of 115x, 37x, and 45x respectively, anything but value territory.

In the midcap space, names like Max Healthcare and GE Vernova have also seen FII accumulation. The conclusion Arora draws is pointed: this is not indiscriminate selling driven by disillusionment with India. Foreign investors sold relatively lower-PE legacy names and bought higher-growth, higher-multiple businesses. That is a valuation preference, not a country call.

The Nvidia-Coca-Cola problem with India's market lens

To frame why market performance has been disappointing in absolute and relative terms, alongside currency headwinds, Arora used a striking global analogy. Nvidia, expected to grow earnings by 60–70% this year, currently trades at a lower PE than Coca-Cola, which is projected to grow at just 6–7%. Yet Coca-Cola has outperformed Nvidia over the past five-plus months.

His point: markets routinely misprice growth relative to multiples, and demanding that every company or country carry the same valuation multiple is fundamentally flawed. India's underperformance, in his view, reflects a similar mispricing dynamic — not a structural exodus.

The bigger picture

The breadth of FII participation is itself telling. Four years ago, roughly 900 Indian companies had at least a 1% FII stake. That number has now grown to approximately 1,300 companies. Foreign capital has spread deeper into the market even as it retreated from the familiar frontliners.

For investors reading India's macro story through the lens of FII outflow data alone, Arora's analysis offers an important corrective: the headline number conceals a far more nuanced, and arguably constructive, underlying reality.