Foreign institutional investors (FIIs) have remained net sellers in Indian equities over the past two years, deterred by the market's premium valuations and a slowdown in corporate earnings. Their buying and selling, tracked daily through exchange and depository data, is one of the most closely watched barometers of foreign sentiment toward India, which is why any turn in the trend draws wide attention. Avinash Agarwal, Senior Vice President & Head – Equity at Bandhan Life — the Bandhan group-promoted insurer formerly known as Aegon Life — believes that tide could turn, arguing that India offers a diverse pool of large companies with consistent growth and greater earnings visibility.

In the latest installment of the ETMarkets Smart Talk series (original interview), Agarwal fielded questions spanning the market outlook, earnings, capital expenditure and fund flows. The topics covered included:

Market stabilisation. Indian equities have shown signs of steadying after posting back-to-back returns of more than 1% in June and July, and Agarwal was asked how he is reading the market in this environment.

Q1 earnings. With most June-quarter results now released, the discussion turned to what the Q1 numbers and management commentary indicate.

Private capex. Private sector capex announcements — companies committing fresh money to expand capacity, a key input for future revenue growth — have remained subdued over the past 12–18 months, raising the question of whether a delayed investment cycle could push back expected earnings growth for India Inc., and what the outlook for private capex means for corporate earnings.

FII flows. Foreign institutional investor inflows have been largely positive so far in August, prompting the question of whether the "smart money" is slowly moving back to India.

Valuations. After the correction seen in the first half of 2026, the interview examined whether India's valuation premium has corrected and, if not, whether the country can continue to command premium valuations compared with other emerging markets.

Froth and value. The conversation also addressed whether there are pockets of froth in the market that investors should avoid, and which sectors still offer reasonable valuations despite the rally.

IPO pipeline. Finally, Agarwal was asked for his view on the new IPOs that have started hitting Dalal Street — as India's stock market is colloquially known — after a pause of several months, a window on primary-market risk appetite. Taken together, the questions frame the variables investors are weighing in the months ahead: whether Q1 earnings signal a durable recovery, when private capex revives, and whether the August turn in foreign flows holds. The full question-and-answer session is available in the original ETMarkets report linked above.