Goldman Sachs Identifies 12 Indian 'Alpha' Stocks Amid Record FII Selloff

Goldman Sachs has identified 12 Indian stocks as medium-term 'alpha' ideas, including Hindustan Unilever Ltd, Larsen & Toubro Ltd, and Bajaj Auto Ltd, amid a record exodus of foreign institutional investors (FIIs) from domestic equities. The brokerage said FIIs have sold $22 billion worth of Indian equities so far in 2026, exceeding last year's $19 billion outflow.

The bulk of foreign selling is likely over, according to Goldman Sachs, which estimates additional downside risk of around $4-5 billion in incremental outflows even if geopolitical tensions persist.

Foreign ownership in Indian equities has fallen to a 14-year low, with FIIs holding around 16% of Indian equities as of March 2026, compared to about 17% held by domestic institutional investors.

The brokerage noted that falling crude prices alone may not be enough to trigger a strong return of foreign flows into India, and that earnings revisions have become an increasingly important variable guiding foreign flows in Indian equities.

The court will resume hearing on the market trends and the immediate next steps for the identified 'alpha' stocks are expected to be announced in the coming weeks.