FPIs Will Return to Indian Equities Despite Massive Outflows: HDFC AMC CEO
HDFC AMC CEO Navneet Munot expresses confidence that foreign portfolio investors will return to Indian markets despite massive outflows.
Despite a sustained period of selling and significant withdrawals from the Indian stock market, Foreign Portfolio Investors (FPIs) are expected to return as net buyers. This optimistic outlook comes from Navneet Munot, the Managing Director and CEO of HDFC Asset Management Company, who believes that India's robust long-term economic fundamentals will eventually draw these investors back.
The Current Trend of Outflows
The Indian equity market has been facing a challenging period with foreign investors consistently pulling their money out. According to NSDL data, the scale of these withdrawals has been substantial:
- In October alone, up to October 11, FPIs withdrew Rs 44,166 crore.
- The total outflows for 2026 have already crossed the Rs 3 lakh crore mark.
Several global headwinds have contributed to this trend, including elevated global interest rates, the volatility of crude oil prices, and general apprehension regarding investments in emerging markets. While these factors have weighed heavily on market sentiment, domestic institutional investors have stepped up to provide a critical cushion for the Indian equities market.
Signs of Selective Interest
Speaking during the listing of the HDFC FTSE India Equity ETF at the National Stock Exchange (NSE) in Mumbai, Navneet Munot pointed out that the selling isn't absolute. He noted that foreign investors are still showing strategic interest in specific opportunities.
"We have seen FPI outflows over the last several quarters. But you can also see their interest in several of the IPOs, where foreign portfolio investors have participated. In between, there were times when foreign portfolio investors were investing," Munot stated.
Munot emphasized his confidence in the Indian economy, asserting that because the long-term fundamentals remain intact, a shift back toward net buying is inevitable at some stage.
Expanding Passive Investment Options
Coinciding with these insights, HDFC Mutual Fund has expanded its passive investment portfolio by listing the FTSE India Equity ETF on the NSE. This new exchange-traded fund is designed to offer investors a broad and diversified gateway into the Indian market.
Key Features of the HDFC FTSE India Equity ETF:
- Diversification: The ETF tracks the FTSE India Equity Index, which includes 272 different stocks.
- Market Coverage: It provides exposure to both large-cap and mid-cap Indian companies.
- Global Standard: By using an index from a globally recognized provider, the fund aims to attract both domestic investors and, eventually, global investors.
The launch of this ETF is intended to simplify the investment process, allowing participants to gain exposure to a wide segment of India's listed equity market through a single, efficient product.