Foreign institutional investors are rotating back into Indian equities. Corporate earnings growth has broken into double digits in dollar terms, turning Dalal Street into an earnings oasis while international developed markets stall.
Samir Arora, founder and fund manager at Helios Capital, confirmed that Indian corporate earnings are now clocking 10% to 12% annualized growth in dollar terms. That shift follows a two-year drought where 9% to 10% domestic growth was completely neutralized by a 5% to 6% annual rupee depreciation. Global rivals, meanwhile, have seen earnings momentum hit a wall at 8% to 10%. With currency friction stabilizing, relative valuations are forcing global allocators to confront their deeply underweight stances on India.
The initial wave of foreign buying was sparked by a 15% plunge in Brent crude oil prices alongside domestic tax speculation. But that burst was swift. Arora noted that because the initial inflows landed within a compressed one-week window, the volume largely reflected hedge funds covering short bets rather than long-horizon institutional mandates taking root.
"India has to get back under weight that people had made for 2 years, so that money has to come back," Arora said, emphasizing that the relative and absolute hurdles that choked Dalal Street capital flows have dissolved.
Arora dismissed arguments that Indian markets require a tech sell-off in Silicon Valley to suck capital back East. Valuations in artificial intelligence ventures remain sky-high—with private bellwether Anthropic tagged at roughly $1.5 trillion—and United States regulatory rhetoric is unlikely to choke off power grid and data center infrastructure permits.
"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," Arora said. India can outrun global benchmarks even in a roaring bull market abroad.
The fund manager's flagship Helios Flexi Cap Fund has surged 65% over a span of just under three years, crushing the broader benchmark index's 35% to 40% gain across the same cycle. Helios maintains a concentrated core of 30 to 40 holdings. The vehicle built early stakes in beaten-down high-growth companies—scooping up Paytm between ₹450 and ₹500 per share, alongside allocations in Syrma at roughly ₹100 and electric scooter manufacturer Ather Energy.
Yet the major tactical shift is unfolding in large-cap lenders. Helios recently bought back into HDFC Bank after freezing purchases for three to four months. Foreign selling previously battered domestic private banks, creating deep valuation discounts across the sector. Arora sees the reversal of foreign institutional flows triggering a virtuous upward cycle for banking majors, unlocking liquidity as offshore funds rebuild structural positions over the coming quarters.