Non-Resident Indians (NRIs) from the Gulf Cooperation Council (GCC) region, once prominent investors in the Indian equity market are seen shying away due to rupee depreciation and have moved to global funds, said a top financial services executive.
“We were witnessing increased interest from NRIs in the GCC region for some time, but in recent years, the pace of investment has somewhat tempered due to concerns around currency fluctuations,” said Satish Menon, Executive Director, Geojit Financial Services in an interview.
“The depreciation of the Indian rupee has affected overall returns and influenced investment behaviour. As a result, many NRIs are now showing higher interest in global funds as this also takes care of currency risks,” he said. Geojit has strong presence in the GCC region for many years now.
He said despite improvements in technology and digitalisation, NRIs still encounter procedural and operational hurdles to invest in India. “Even opening a trading account can be time-consuming and expensive, especially when documentation needs to be attested in countries where Indian banks do not have a presence,” he said.
Mr. Menon said regulatory limitations, such as the rule allowing only a single PIS account, also make it difficult for investors to simultaneously maintain PMS allocations and actively invest in direct equities.
“While GIFT City funds have helped address some regulatory and tax-related challenges, seamless access to direct Indian equity markets remains restricted. The latest consultation paper on Re-KYC and KYC Modifications to be enabled digitally is a step in the right direction,” he emphasised.
Looking ahead at future he said, “a weaker rupee combined with a relatively subdued market outlook may dampen enthusiasm in the short term. However, overall optimism about India’s growth trajectory remains strong, and we expect NRIs to continue allocating a meaningful portion of their portfolios to India.”
He said 2026 could potentially provide stronger performance than 2025.
“This optimistic outlook is based on two primary expectations: Foreign Institutional Investors (FIIs) are expected to reverse their selling trend as India’s premium valuations compared to Emerging Markets (EMs) has rationalized. Domestic corporate earnings are projected to improve significantly, starting from the December 2025 quarter,” he said.
“The realization of this positive forecast is highly contingent on the finalization of the India-US tariff deal, which remains a critical factor for market direction in 2026,” he added.
Answering a question on the reason behind reduction of FII exposure in the domestic market, he said in 2025 FIIs had sold approximately $16 billion worth Indian equities, which weighed on the overall market performance.
“The impact was most pronounced in sectors where selling was concentrated, such as IT, Fast-Moving Consumer Goods (FMCG), Energy, and Metals. Despite resilient inflows from Domestic Institutional Investors (DIIs) and retail participants, the performance of mid-cap and small-cap segments was also impacted, primarily due to a fall in overall market liquidity driven by the FII outflows,” he said.
On the rapid growth of retail investors in the post COVID era, he said it was closely linked to short-term trading strategies, including momentum stocks, intraday trading, and futures and options (F&O).
“The current market environment, characterized by high valuations, modest earnings, and increased global risk volatility, has made such strategies riskier. To navigate the market safely, retail investors should prioritize on long-term wealth creation with eye on stable compounding returns,” he said.
His key advices included focusing on fundamental by investing on well-researched stocks or schemes, targeting growth area by prioritizing investment in sectors poised for structural growth, such as industrialization, manufacturing, infrastructure, and clean energy and maintaining discipline by avoiding panic selling during volatile periods. And most importantly to have patience.
On how to build long-term wealth creation strategies in light of increased market volatility, he said one must stay disciplined and avoid impulsive, emotion-driven actions like panic selling. One must identify and stay invested in well-researched stocks, industries, or mutual fund schemes.
”Adhere to a straightforward “buy and hold” investment pattern for the long term. Maintain a balanced portfolio mix of equity, debt, gold, and cash, adjust allocations based on the prevailing economic and stock market cycles,” he added.
On the success rate of this year’s IPOs and the outcome for retail investors he said, “In 2025, approximately two-thirds of the IPOs listed above their issue price. However, the actual gains for retail investors have been modest, with average returns dropping significantly from 2024 levels to around 10%.”
“This muted performance for retail investors was largely due to high valuations and a prevalence of Offers for Sale (OFS) by promoters and private equity (PE) / venture capital (VC) backed companies. Many of these companies had low requirements for fresh capital due to a lack of concrete capital expenditure (capex) plans, a key factor of future growth,” he said.
On the likely performance of the market, he said a timely finalisation of the India-U.S. trade deal was crucial for supporting market sentiment and economic growth.
“The US accounts for approximately one-fifth of India’s total exports. Key impact is on export-oriented sectors like Gems & Jewellery, Textiles, and Engineering goods. The IT and Pharma sectors would also be impacted due to high revenue exposure and lack of spending in the US. Delay is expected to negatively impact corporate earnings growth and stock market in 2026, a risk that is not fully factored into current market valuations,” he said.
“The delay has already contributed to downward pressure on the INR, by increase in current account deficit and fall in exports. However, this deficit may moderate, as a large portion of the current account deficit is triggered by high demand for gold during the festive and wedding seasons,” he pointed out.
On the plan for transforming Geojit into a full-scale investment platform with new-age broking capabilities he said “Geojit already offers a robust platform ecosystem capable of supporting modern broking features and a wide spectrum of investment products.”
However, customer expectations continue to evolve rapidly, especially with the increased focus on frictionless digital experiences. Over the past year, we have undertaken comprehensive upgrades across all customer-facing applications,” he said.
“We are now executing an accelerated development roadmap aimed at creating a unified and intuitive investment journey across platforms. The objective is to deliver a seamless, holistic experience where execution, insights, and services integrate effortlessly, positioning Geojit as a fully future-ready investment services company,” he added.
