Jefferies sees India’s 2025 as consolidation year, forecasting stability before a 2026 growth-driven rally
New Delhi
India is set to attract between $50 billion and $70 billion in fresh equity inflows over the next 12 months, global brokerage Jefferies said in its latest Greed & Fear report. The inflows are expected to be driven by steady contributions from mutual funds and systematic investment plans (SIPs), which continue to provide strong domestic support to markets.
Despite foreign investors holding their lowest positions in years, Jefferies stressed that India remains the strongest structural growth story among global markets. The brokerage described 2025 as a year of “healthy consolidation” for Indian equities, predicting stability before a possible rally in 2026 as economic growth strengthens.
Key government moves, including recent cuts in Goods and Services Tax (GST), are expected to boost liquidity and household consumption. Alongside this, the US Federal Reserve’s latest rate cut could pave the way for the Reserve Bank of India to reduce interest rates later this year, further stimulating investment and demand.
Jefferies suggested that returns of 10–15 percent for investors in Indian equities may prove too modest given the combined effect of tax cuts, potential monetary easing, and robust corporate earnings growth.
The report also highlighted strong opportunities in India’s small and mid-cap companies. Despite higher valuations compared to large-cap peers, these firms continue to deliver better earnings growth, making them attractive for long-term investors.
According to Jefferies, India’s ability to combine rising domestic demand with improving corporate profitability and supportive policy actions positions it as the most compelling growth story in global equities.
