Foreign institutional investors (FIIs) have pulled a massive $53 billion out of Indian equities since late 2024, dragging down several frontline stocks even as domestic institutions step in as the new dominant force in the market, according to Jefferies.
This relentless exodus has weighed on returns, with MSCI India declining about 8 per cent between September 2024 and May 2026 and underperforming MSCI Emerging Markets by a staggering 67 percentage points in dollar terms, the brokerage pointed out in a note. Jefferies linked the selling to an “unfavourable valuation-growth scenario for Indian stocks vs Asia,” driven particularly by surging earnings in semiconductor and memory names in Taiwan and Korea.
