Primary markets may start seeing some traction in Q2: BofA Securities' Maheswari

Subscribe to enjoy similar stories.Muted earnings, premium valuations, currency weakness, relatively attractive emerging market (EM) peers, and India’s limited participation in the global AI value chain have reduced the country's appeal for foreign portfolio investors (FPIs), says Arbind Maheswari, head of India equities at BofA Securities, in an interview with Mint. While global investors remain cautious, domestic flows will continue to support the country's market activity, he says. Edited excerpts of the interview:If we take a step back, in the post-covid recovery phase, India seemed like the only large emerging market that had a story to tell.

And that continued on for nearly three-four years. There was strong visibility on earnings backed by domestic demand resilience, consistent domestic fund inflows and tailwind from supply chain diversification, which was the China plus one theme. So, the market had multiple positive factors going for it and there was really no other competition in the emerging market space.However, over the past two years, this perception has weakened.

Muted earnings delivery, premium valuations, currency weakness, relatively attractive valuations across other EMs, and India’s limited participation in the global AI value chain—both hardware and software—have reduced India’s appeal to FPIs. Consequently, FII flows recorded the highest ever outflow of $13 billion in March 2026, a sharp reversal from an inflow of $2.4 billion in February 2026; FII flows show the continued trend in April, tracking at $4 billion month-to-date. Yes.