₹25 Billion FII Outflow: What Could Bring Foreign Investors Back? | Jefferies' Jibi Jacob

Foreign investors have pulled out around $25 billion from Indian equities this year, but the flow picture may be showing early signs of change. Jibi Jacob, Head Of Equity Capital Markets, India, Jefferies, explains what is keeping foreign investors cautious despite strong Indian growth and improving earnings. While India trades around 20 times one-year forward earnings, its valuation premium over emerging markets remains elevated. Jacob highlights the relative attractiveness of emerging markets, driven by earnings upgrades linked to memory stocks and AI plays. At the same time, foreign participation is beginning to emerge in recent deals, while two large jumbo IPOs are on the horizon. Could improving deal activity and fresh IPO opportunities help revive foreign investor interest in India?