India back on FII radar as oil prices fall and AI trade unwinds: Kotak's Nilesh Shah

Résumé détaillé

Nilesh Shah, Managing Director of Kotak Mahindra AMC, said India's cheaper valuations, steady earnings growth and improving macro environment are drawing interest from foreign investors, while also calling for a more consistent tax framework across investment products.

Foreign investors are increasingly turning positive on India as lower crude oil prices and the unwinding of the global artificial intelligence (AI) trade improve the country's investment case, according to Nilesh Shah, Managing Director of Kotak Mahindra Asset Management Company (AMC), which managed funds worth $4.77 billion as of September 30, 2026.

He expects overseas allocations to India to move towards a neutral position after a prolonged period of underweight positioning.

Shah said recent foreign inflows are supported by improving macro conditions rather than short-term market moves. He added that India's earnings growth, combined with more reasonable valuations after two years of underperformance, is attracting global investors.

"I found meetings possible with all the investors we wanted at the highest level," Shah said after returning from meetings with investors across the US and Canada. He added that "many of them cut the check as we spoke, and many of them were looking to cut the check."

According to Shah, lower crude oil prices and a reversal in the AI-driven global investment theme have become the catalysts overseas investors were waiting for.

"The catalyst they wanted was lower oil prices and reversal of AI trade. Both are happening, and hence we are seeing their allocation moving towards a neutral trajectory," he said.

Shah noted that India remains firmly on the radar of family offices, sovereign wealth funds, pension funds and endowment funds. While investors with local research teams are looking across largecap, midcap and smallcap stocks, those without on-ground presence are largely focusing on largecap companies.

Shah said the recent recovery in terms of market valuations follows a prolonged period of consolidation rather than excessive optimism.

"We are climbing back because in the last two years valuations have become 30% cheaper as corporate India continued to deliver earnings growth," he said.

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