Samir Arora says foreign investors are coming back to Indian stocks

what happened

Foreign institutional investors are returning to Indian equities, according to Samir Arora, founder and fund manager at Helios Capital, as TradingView reported. Earlier inflows followed a 15% drop in crude oil prices and speculation about possible tax changes. Arora thinks much of that money arrived within a single week and mostly closed short positions held by hedge funds, rather than representing new long-term bets.

He sees a more durable driver in company profits. For the past two years, local earnings growth was eaten up by the yearly weakening of the rupee. That currency pressure is now fading, and he expects Indian profits in dollar terms to rise 10% to 12%, compared with 8% to 10% for global peers. Arora also rejected the idea that India needs an AI sell-off to outperform, saying: "Let's not position ourselves in our minds that we are an anti-AI play and that we will only do well when the world does badly."

Helios recently bought HDFC Bank shares again after staying away for three to four months. Arora links this to a wider change in sentiment toward large banks, which had suffered heavy foreign selling.

why it matters

For markets, a sustained return of foreign capital would support India's large caps and banks, but how lasting it proves depends on whether earnings growth holds. For dollar-based investors, the rupee's path remains the key variable.

market impact

Indian equities: returning foreign capital and dollar-terms earnings growth support the market

• ▲Indian equities pressure up — returning foreign institutional money and stronger earnings in dollar terms
• ▲HDFC Bank shares pressure up — renewed buying by a large fund after a months-long pause

tags

instruments