Kotak Institutional Equities flagged off the Chasing Growth 2025 conference and saw widespread participation from both local and global investors. Uday Kotak, Founder & Director of Kotak Mahindra Bank, delivered the inaugural address focusing on India’s economic and financial landscape in the Trump era.
Here is a quick look at the key takeaways from his address-
#Changing trends in FII flows
According to Uday Kotak, there are wide-spread debates on the impact of these changes, “The primary change has been felt in capital flows, with the current strength of the US dollar stemming from increasing investor inclination to hold dollar assets.”
The FII flows so far in 2025 have been rather discouraging. The net FII selling this year is already above Rs 1 lakh crore, at Rs 1.15 lakh crore. Of this Rs 87,000 crore was sold by FIIs in January when the Dollar Index hit a high of 110. In February, though the Dollar Index has moderated to 106 levels, FII flows continue unabated. Total outflows in February is just a tad shy of Rs 29,000 crore.
“This is a clear change from the previous era, when investors were looking at diversifications across asset classes. Currently, the US stock market accounts for about 70% of the global market cap,” observed Kotak
Since the opening up of the foreign equity portfolio account in 1995, India currently has roughly
(1) $800 billion of stock of foreign capital through FPIs
(2) $900 billion-1 trillion of FDI stock
(3) $500- 600 billion of foreign commercial borrowings.
Kotak pointed out that in that context, India has adequate forex reserves at $560 bn (adjusted for forward positions). He believes, “India has more than 2X reserves on repatriable foreign assets. India’s current account is well under control at 1.2-1.3% of GDP ($50 billion of deficit).”
#Markets resilient
Speaking on the markets, Uday Kotak cited that “Indian markets are resilient and at scale for foreign investors to move in and out.”
Interestingly, the markets are currently taking a breather within a tight range after the recent selloff. The Nifty and the Sensex are down around 3% each for 2025 so far with the Nifty struggling around the psychologically important 23,000 mark.
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