India Inc. – Sentiment & Outlook for 2025

Over the past year, the S&P 500 returned 23%, while India lagged at -1% due to strong FII outflows. Despite this, India outperformed EMs over the decade (8% vs. 1%), led by small and mid-caps. FIIs turned record sellers in CY24, pressuring valuations, while DIIs maintained a contrarian stance. IPO activity rebounded with 77 listings in 2024, with momentum expected in 2025. Post-COVID, India’s stock rally is now moderating, with valuations normalizing amid better US returns and cheaper EM opportunities. Amid this, key sectors like quick commerce, autos, cement, and EMS remain well-positioned for long-term structural growth.