Why Indian Equity Returns Look Different in Dollars 15May2026

Why Indian Equity Returns Look Different in Dollars 15May2026

 

Follow @vrk100

 

(This is my 513th blog since 2010. Over the years, I have covered global financial markets, with a focus on India, and continue to share insights to help readers understand complex topics in simple language.

The views expressed here are for information purposes only and should not be construed as a recommendation or investment advice. While the author is a CFA Charterholder with nearly 25 years of experience in financial markets, this content is intended to share general insights and does not constitute financial guidance. 

Please consult your financial adviser before taking any investment decision. Safe to assume the author has a vested interest in stocks / investments discussed if any.) 

Indian stock market returns can look very different when measured in rupees versus US dollars. The difference is not driven by company performance, but by currency movement over time.

India Equities in a Global Lens:

For investors outside India, the story does not end with stock performance. Returns are also shaped by changes in the Indian rupee against the US dollar, which means the same market can deliver different outcomes depending on the currency in which it is viewed.

Two Ways of Looking at the Same Market:

The BSE Sensex and the BSE Dollex 30 are used as proxies for the Indian equity market. Both represent the same basket of 30 large, liquid and financially sound Indian companies. The only difference is currency denomination. 

The Sensex is measured in rupees, while the Dollex 30 expresses the same performance in US dollars after accounting for currency movement.

Because they track the same underlying companies, any gap between them is not about stock selection. It is entirely driven by currency.

Where Currency Changes the Story:

For a domestic investor, returns are straightforward. If the Sensex rises, wealth in rupee terms rises. For a foreign investor, however, there is an extra layer. 

Even if Indian stocks rise, a weakening rupee reduces the return when converted back into dollars. 

Similarly, a stronger rupee can boost foreign investor returns even when the underlying stock performance remains the same.

This is why the same market can feel stronger or weaker depending on the currency perspective.

What the Data Show:

Chart showing Indian stock market returns in local currency (Indian rupee) versus US dollar terms: BSE Sensex vs BSE Dollex 30:

 

The chart above compares annual returns and trailing returns of the Sensex in rupee terms and the BSE Dollex 30 in dollar terms. It also shows the currency impact, which reflects the effect of rupee movement against the dollar over time.

A few patterns become clear from the data. Indian equities have delivered solid returns in local currency terms over the years. However, the returns in dollar terms are consistently lower in most periods. 

The difference is primarily explained by gradual depreciation of the rupee over time.

Examples from the Data Chart above:

In 2017, Indian stocks had a great year in rupee terms. The Sensex rose by 27.9 per cent. But the BSE Dollex 30, which reflects the same market in US dollars, actually gained even more, that is, 36 per cent. 

Why? Because the rupee strengthened (by about 8%) against the dollar that year. 

A stronger rupee amplified returns for foreign investors, giving them more dollars for each rupee of investment, even though the stock market itself performed the same.

Contrast this with 2022. The Sensex rose modestly by 4.4 percent in rupees. However, the Dollex 30 fell by 6.3 per cent in dollar terms. The reason: the rupee weakened (by about 11%) against the dollar. 

Even though the Indian market delivered a small positive return locally, foreign investors saw a loss in their home currency. A depreciating rupee reduced their dollar-denominated returns.

Trailing Returns: From an FPI perspective, the Sensex’s 11.4 per cent annualised return, over the past 10 years, drops to 7.5 per cent in dollar terms, meaning currency (India rupee depreciation) has reduced foreign investors’ returns by nearly 4 percent per year.

These examples show how currency movement can either enhance or reduce returns for foreign investors, independent of how the stock market itself performs.

FPI Behaviour:

Foreign portfolio investors (FPIs) allocate capital based on expected returns in their home currency, making currency movement an important input in their decisions. A weakening rupee can reduce dollar returns and act as a headwind, while a stable or stronger currency improves expected outcomes. 

However, currency is only one of several drivers, along with earnings growth, valuations, interest rates, and global risk conditions.

A common market narrative is that sustained rupee depreciation alone explains weak foreign inflows into Indian equities. While currency matters, FPI flows are influenced by a combination of macro and market factors rather than a single variable.

Why Foreign Investors Care About This:

Foreign investors evaluate returns in their home currency, so what matters is not just stock performance but the converted value in dollars or euros. This is why a strong domestic market can appear weaker in dollar or euro terms when the rupee depreciates.

Conversely, a stable or strengthening rupee can enhance dollar returns, allowing foreign investors to outperform local investors even from the same market performance. 

The Bigger Lesson:

Investing in any country is not just a bet on companies. It is also a view on currency. Over long periods, currency movement can quietly add or subtract meaningfully from equity returns when seen from a global perspective.

This is why global investors always evaluate markets on a currency adjusted basis. It is not a different market. It is simply a different lens on the same market.

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References:

See Update 03Jan2026 with charts 162 and 163 in blog: Forex Data Bank - to check the data of Indian rupee depreciation versus the US dollar (27 years data)

Tweet 20Jan2026 Sensex at 40 years  - Sensex price returns and TRI

Value Research BSE Indices 

Sensex factsheet

BSE Dollex 30 factsheet 

 

Understanding the Rhythm of Quarterly and Annual Results in India 13May2026

Understanding the Rhythm of Quarterly and Annual Results in India 13May2026

 

Follow @vrk100

 

(This is my 512th blog since 2010. Over the years, I have covered global financial markets, with a focus on India, and continue to share insights to help readers understand complex topics in simple language.

The views expressed here are for information purposes only and should not be construed as a recommendation or investment advice. While the author is a CFA Charterholder with nearly 25 years of experience in financial markets, this content is intended to share general insights and does not constitute financial guidance. 

Please consult your financial adviser before taking any investment decision. Safe to assume the author has a vested interest in stocks / investments discussed if any.) 

Companies in India announce their financial performance at quarterly / annual intervals so that investors and the public can understand how they are doing. 

They follow fixed timelines set by regulators, ensuring transparency and structured reporting. This also creates what is called earnings season in the stock market. The article includes a case study of a paint company at the end. 

Chart showing Reporting Window / Timelines for financial results declaration by listed companies in India (SEBI norms) >

 
What are quarterly and annual results in a company?

Quarterly results are financial updates published every three months (calendar quarters) showing performance during that period. Annual results cover the full financial year and give a complete picture of the company’s performance.

Why do companies need to declare financial results regularly?

Regular results help investors, regulators and the public track a company’s performance. It ensures transparency and reduces information gaps in the market.

Who sets the rules for when companies must announce results in India?

The rules are set by India's capital market regulator Securities and Exchange Board of India (SEBI) through listing regulations that apply to listed companies in India. 

The SEBI timelines are as per Regulation 33 of SEBI (LODR) Regulations.

What is the difference between quarterly results and annual results?

Quarterly results cover a three-month period, while annual results cover the entire financial year and are usually audited.

Why do most Indian companies follow an April to March financial year?

Many Indian companies follow government and tax reporting cycles, which are based on April to March, making compliance and reporting more aligned.

Do all companies in India follow the same financial year?

No, some companies, typically companies with a foreign parent, follow a January to December financial year (however, most listed companies follow April to March except some foreign companies).

Such companies with a foreign parent follow different financial years not due to SEBI rules, but to align with their global parent companies for easier consolidation and reporting. 

Some examples of companies in India following Jan-Dec financial year >

ABB India
Castrol India
Crisil Ltd
Elantas Beck India
Hexaware Technologies
KSB Ltd
Schaeffler India
Varun Beverages

Exceptions to typical foreign companies reporting:

There are some exceptions to Jan-Dec reporting by foreign companies.

For example, Kennametal India follows a July–June financial year to match its US parent’s reporting cycle, enabling smoother group consolidation.

Siemens Ltd, likewise, follows an October–September financial year to align with its Germany-based parent, ensuring consistent global reporting. 

How much time do listed companies get to announce quarterly results?

As shown in the above chart, listed companies in India generally get 45 days after the end of a quarter to announce results, while annual results are allowed up to 60 days. 

During the COVID-19 pandemic in 2020, SEBI gave a one-time extension to the result declaration timelines for listed companies.

Why is there a 45-day rule for some quarters and a 60-day rule for year-end results?

Quarterly results are simpler and quicker to prepare, while annual results require full auditing and therefore more time is given. 

What happens if a company delays its results?

Delays can lead to regulatory scrutiny, penalties and loss of investor confidence, since timely disclosure is mandatory for listed companies.

Do stock prices move when results are announced?

Yes, stock prices often move because results provide new information about earnings, growth and future outlook.

Why do companies often announce results around the same time?

Because most companies follow the same reporting deadlines, results tend to cluster around the same period, creating earnings season.

Earnings season is the period when many companies announce their quarterly results, usually spread across a few weeks. 

Which companies announce results early in the season?

> Banks and financial services companies
> IT services companies
> Large listed companies with strong reporting systems

Which companies usually announce results later in the season?

> Manufacturing companies
> Infrastructure and construction companies
> Diversified industrial groups, with various subsidiaries
> Companies with multiple subsidiaries or complex operations

Note: Subsidiaries typically announce their results first because their financials are later consolidated into the parent company’s overall results. Only after that can the parent finalise and report its own consolidated results, such as in large groups like Larsen & Toubro, which has listed susidiaries, like, LTM, LTTS and L&T Finance. 

Why do some sectors report earlier than others?

It depends on how quickly financial data is collected, verified and audited. Companies with simpler structures and faster accounting systems tend to close their books earlier, while complex businesses take more time due to consolidation and verification needs.

Do banks and financial companies follow the same result timelines?

Yes. They follow the same SEBI deadlines as all listed companies. However, they usually report earlier within the window because their systems are more standardised and financial data is available faster.

 

To sum up

Quarterly and annual results in India follow a clear timeline set by regulators. These deadlines ensure timely disclosure and consistent reporting across companies. 

Together, they create the earnings season that investors closely track.

A case study below tracks a paint company’s result announcement timelines over 21 quarters for reference. 

This information is for general awareness and should not be construed as investment advice; companies mentioned are for informational purposes only. 

 

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Additional information:   

Case Study: Result Timeline Pattern of a paint company (21 Quarters data):

This analysis is based on 21 quarterly results announcements, by this paint company, from FY2020-21 to FY 2025-26.   

Quarterly results announcements:

Across the 21 quarters (Mar2021 to Mar2026) analysed for Asian Paints, a clear structural shift in result announcement timelines is visible. Between 2021 and 2023, quarterly results were consistently declared within 20–23 days after quarter-end, indicating a fast and tightly clustered reporting cycle. 

However, in 2024 and 2025, this shifted significantly to an average of 37 days, showing a clear move toward longer timelines and higher variation.

Annual results announcements:

A similar trend is visible in annual results (Jan–Mar quarter). Between 2021 and 2025, results were typically announced within 40 days on average, but in Jan–Mar 2026, the timeline is extended sharply to 59 days, nearly utilising the full regulatory window.

By the way, the company will be reporting its Jan-Mar2026 quarterly results on 29May2026.

Overall, the data suggest a transition from a fast, predictable reporting pattern to a more extended timeline across both quarterly and annual results, likely reflecting increasing consolidation complexity and more extensive review and disclosure processes.

Even for a technology-efficient company like Asian Paints, faster data processing (or better AI adoption) may not necessarily translate into earlier result announcements, as statutory reporting timelines are primarily driven by audit, consolidation and governance approval cycles. 

 

Possible factors contributing to longer reporting timelines at a large, corporate governance-focused company like Asian Paints include:

1) Consolidation complexity and a preference for accuracy over speed: 

Reporting across multiple subsidiaries and geographies may extend the time required for final consolidation. Mature large-cap companies often prioritise completeness and accuracy over early publication within the allowed window.

2) Business diversification, scale and operational complexity: 

Expansion into adjacent categories such as home improvement, along with large distribution networks and extensive supply chains, may add additional layers of accounting / reconciliation and inventory validation before final reporting.

3) Macroeconomic uncertainty: 

Volatility in input costs (such as prices of crude oil derivatives), demand conditions and currency movements may require additional validation before finalisation.

4) Stricter disclosure review and higher audit scrutiny: 

In a tighter regulatory environment, strong governance standards and more detailed audit procedures may lead to more extensive internal checks and longer review before final approval.

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References:   

BSE Results Calendar 

In India, Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements, LODR) Regulations, 2015 is the rulebook for how listed companies must report their financial health to the public and stock exchanges. 

Tweet 13May2026 - MOSPI postpones annual GDP estimates deadline to June 7th from last working  day of May

Tweet 11May2026 - US SEC proposes to make quarterly results declaration optional 

Asian Paints Results

Screener.in Asian Paints

 

 

 

Earnings Quality: Understanding Cash Conversion in Stock Analysis 11May2026

Earnings Quality: Understanding Cash Conversion in Stock Analysis 11May2026

 

Follow @vrk100

 

(This is my 511th blog since 2010. Over the years, I have covered global financial markets, with a focus on India, and continue to share insights to help readers understand complex topics in simple language.

The views expressed here are for information purposes only and should not be construed as a recommendation or investment advice. While the author is a CFA Charterholder with nearly 25 years of experience in financial markets, this content is intended to share general insights and does not constitute financial guidance. 

Please consult your financial adviser before taking any investment decision. Safe to assume the author has a vested interest in stocks / investments discussed if any.) 

Most investors in India focus on net profit growth when analysing companies, but this can be misleading. A company can show rising profits while struggling to generate actual cash.

This blog explains how to compare Cash Flow from Operations (CFO) with Net Profit to understand earnings quality, durability and real cash generation. 

It is a simple framework used by serious investors to judge whether profits are real or just accounting entries.

1) Why are cash flows important for analysing a stock or company’s business?

Cash flows show the actual money entering and leaving a business. While profit is an accounting measure, cash is what pays salaries, repays loans, funds expansion and rewards shareholders. 

A company that generates strong cash flow is financially more stable, even if reported profits fluctuate in the short term.

2) Why is cash flow often more important than net profit?

Net profit is based on accounting rules, estimates and timing assumptions. Cash flow reflects real transactions. In some cases, companies can show profits on paper but struggle to collect money from customers or manage working capital. 

This is why investors often ask a simple question: how much of this accounting profit is turning into real cash?

3) How much of this accounting profit is turning into real cash?

This is exactly what the CFO vs Net Profit comparison measures. If a company earns Rs 100 crore in profit but generates only Rs 60 crore in operating cash flow, then a significant portion of profit is not converting into cash. 

The gap of Rs 40 crore usually reflects money not yet collected from customers (receivables), unsold inventory or other timing differences in working capital between recording profits and receiving cash.

For example, a power equipment manufacturer may sell machinery worth Rs 25 crore in Feb2026, but receive the cash only in Apr2026 (the next financial year). 

The sale is recorded as revenue in FY 2025–26, but the cash inflow appears in FY 2026–27, creating a timing mismatch between profit and cash flow.

Over time, this gap becomes important for understanding business quality.

4) Why is multi-year CFO versus NP better than single-year ratio?

A single year can be distorted by temporary factors like inventory build-up, delayed receivables, tax adjustments or one-time payments. Multi-year analysis smooths out these fluctuations and shows whether the business consistently converts profit into cash over time. 

It helps identify structural trends rather than short-term noise.

To see why this matters in practice, let’s look at a real example.

5) CFO versus Net Profit Comparison: Real example:

Chart showing CFO vs Net Profit Comparison of a listed MedTech firm in India with data for the past seven years: Cumulative cash flows versus Cumulative net profit >

(click on the chart to view better)

We calculate the cash conversion ratio (CCR) as CFO divided by net profit. 

This MedTech company (data in chart above) shows a strong long-term earnings quality profile, with a 7-year cash conversion ratio of around 96 percent and 5-year ratio of 89 per cent, indicating that most of the reported accounting profits are ultimately backed by operating cash flows. 

This suggests a fundamentally cash-generative business over a full cycle. However, the shorter-term picture shows some moderation, with 2-year cash conversion dropping to around 85 percent. 

This indicates that while the long-term model remains sound, recent periods may reflect temporary working capital pressures or timing gaps between profit recognition and cash collection, which are worth monitoring but not yet structurally concerning given the historical consistency.

6) What are the shortcomings of focusing only on CFO vs NP?

CFO vs NP is useful, but not sufficient on its own. It does not explain why cash conversion is weak or strong. A proper analysis must also look at working capital components like receivables, inventory and payables (commonly known as Cash Conversion Cycle analysis). 

7) Why is earnings quality important in investing?

Earnings quality tells us how reliable a company’s profits are. High-quality earnings are backed by cash, repeatable business activity and stable operations. Low-quality earnings may come from aggressive accounting or temporary factors. 

Investors prefer companies where profits are sustainable and backed by actual cash generation. 

8) Why does CFO vs NP depend on sector?

Different industries behave differently. In FMCG companies, cash conversion is usually very stable and close to 100 percent or more. In contrast, capital goods infrastructure, or government-dependent businesses may have long payment cycles, leading to lower or more volatile cash conversion.

Some industries / sectors naturally have lower cash conversion:

Infrastructure
EPC/construction
Real estate
Defence
Telecom buildout phases
Rapidly scaling retail
Businesses with long receivable cycles

Meanwhile, sectors like the following usually show very high cash conversion:

FMCG
Software
Consumer brands
Stock / commodity exchanges
Asset-light services

Therefore, interpretation must always be industry-adjusted.

9) Why should we evaluate earnings quality, durability and cash realisation together?

Earnings quality tells us how reliable profits are. Durability tells us whether those profits can continue in the future. Cash realisation tells us whether profits are actually converting into usable money. 

All three together provide a complete picture of business strength.

10) Why is it easier to manipulate net profit than cash flows?

Net profit includes accounting estimates such as revenue recognition, provisions, depreciation, and other non-cash adjustments, which can involve judgment and timing differences. 

Cash flows are harder to manipulate because they reflect actual bank movements of money into and out of the business.

While not impossible, sustained manipulation of cash flows is significantly more difficult than adjusting accounting profits.

A classic example is the case of erstwhile Satyam Computer Services, where reported profits and even cash balances were falsified for years through egregious accounting misstatements. 

Such cases are rare, but they highlight why investors often prefer to verify earnings quality through cash flow analysis rather than relying only on reported net profit.

11) Why use a multi-year CFO vs NP window?

A multi-year window helps remove noise from business cycles and one-time events. It allows investors to understand whether cash conversion is structurally strong or weak. This is especially important in industries where performance can vary significantly year to year.

12) When should investors worry if CFO vs NP is below 80 percent for multiple years?

A consistently low cash conversion ratio (CCR) below 80 percent over several years may indicate weak earnings quality, depending on the industry. It could suggest issues such as poor receivables collection, inventory build-up or aggressive accounting. 

However, interpretation must always consider the nature of the business, as some sectors naturally have lower cash conversion. 

The 80 per cent threshold in not a verdict, but it is a signal to investigate further into receivables, inventory, cash flow trends and industry benchmarks before drawing any conclusions about financial health. 

What are the consequences of consistently low cash conversion ratio (CCR) of, say, less than 80 per cent or 75 per cent over long periods of say, over five years (it does not automatically mean fraud or a bad company, but a warning sign):

> Prolonged working capital cycle

> Higher dependence on debt financing

> Rising interest and finance costs

> Weak cash conversion and poor earnings quality

> Increased financial and liquidity risk 

13) International experience:

One could observe such earnings–cash divergence in global companies as well, ranging from genuine operational stress to outright fraud.

For example, Boeing has at times reported healthy profits on paper while generating weak operating cash flows, driven by factors such as prolonged aircraft programme delays, regulatory grounding of its 737 MAX fleet and the complexities of long-term contract accounting

In Europe, companies like Wirecard AG highlighted how aggressive and outrageous accounting practices can severely distort reported earnings, reinforcing why cash flow analysis is a critical validation tool in financial analysis. 

 

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Additional info for Your Own Exercise:   

 

P.S. 2: Two images showing data of CFO vs Net Profit data for two companies >

Based on the data given in the images, readers can do their own exercise further on the two companies' financial statements and search for answers as to why the cash conversion ratio looks odd or out of place. 

Image showing data of an Aerospace & Defence listed firm in India: the company suffers from cash flow problems due to government contracts and nature of its business to some extent  >

Image showing data of an Alocoholic Beverages listed firm in India: this is an extreme case where CFO to net profit ratio has been consistently higher than 150% requiring readers to probe further its financial statements and find out what is contributing to the persistence of higher cash flows compared to net profit declared  > 

 

P.S. 1: Screenshots of the company for readers >

Screener.in

Three screenshots showing > Fundamentals, Peer comparison, cash flow and profit and loss statement of a MedTech firm Poly Medicure Ltd >

 

 

 

 

Oracle Financial Services Software (OFSS): A Cash Machine or a Missed Growth Story? 10May2026

Oracle Financial Services Software (OFSS): A Cash Machine or a Missed Growth Story? 10May2026

 

Follow @vrk100

 

(This is my 510th blog since 2010. Over the years, I have covered global financial markets, with a focus on India, and continue to share insights to help readers understand complex topics in simple language.

The views expressed here are for information purposes only and should not be construed as a recommendation or investment advice. While the author is a CFA Charterholder with nearly 25 years of experience in financial markets, this content is intended to share general insights and does not constitute financial guidance. 

Please consult your financial adviser before taking any investment decision. Safe to assume the author has a vested interest in stocks / investments discussed if any.) 

This is an opinion piece on the stock of Oracle Financial Services Software and why the stock appears to be less attractive for retail investors on a risk-reward basis. 

 

 

1. Introduction: Understanding OFSS Beyond the Surface:

Oracle Financial Services Software (OFSS) is a subsidiary of the US-based Oracle Corporation and operates in the niche segment of banking and financial software solutions. The company provides core banking systems, risk management tools and enterprise software to global financial institutions. 

While it is fundamentally a high-quality and highly profitable business, the way it allocates capital and distributes cash flows makes it a very different kind of investment story compared to many other listed Indian software companies.

2. Shareholding Pattern: Limited Institutional Ownership:

The shareholding structure of OFSS shows Foreign Portfolio Investors (FPI) holding 8 per cent, Domestic Institutional Investors (DII) holding nearly 9 per cent and retail investors holding about 10 per cent. 

Institutional participation remains relatively modest, with both FPI and DII ownership not significantly higher than retail ownership. 

This is somewhat unusual for a financially strong and consistently profitable technology company and it reflects the market’s sceptical view on its long-term growth profile. 

3. Exceptional Cash Flow Generation Over Time:

OFSS has demonstrated extremely strong cash flow generation over the long term. Over the past 10 years, the company generated approximately Rs 16,900 crore in free cash flow and distributed nearly Rs 15,800 crore as dividends. 

Over the last 5 years, it generated around Rs 10,000 crore in free cash flow while paying out about Rs 10,800 crore in dividends. 

This near one-to-one relationship between free cash flow and dividend payout is rare among listed Indian IT companies and highlights the consistency of its cash-generating ability. 

4. Debt-Free Balance Sheet and Capital Allocation Context:

A key point often overlooked is that OFSS has remained a debt-free company for several years. This means that free cash flow does not need to be directed toward debt repayment or interest servicing. 

In such a structure, capital allocation decisions essentially come down to reinvestment into the business or distribution to shareholders. The company has consistently chosen the latter, with a strong and sustained dividend payout policy. 

This makes dividends a strategic capital allocation choice rather than a financial necessity. 

5. Dividend Policy and Parent Company Structure:

Given that Oracle Corporation holds a majority stake of more than 70 per cent, a large portion of dividends ultimately flows back to the parent company. This ownership structure helps explain why OFSS has historically maintained a high dividend payout ratio. 

In practical terms, the Indian subsidiary functions as a highly efficient cash-generating unit within the larger global Oracle ecosystem, with limited emphasis on aggressive reinvestment-led expansion at the subsidiary level. 

6. Dividend Yield, Valuation and the Growth vs Income Trade-Off:

The company’s consistent payout of most of its free cash flow has resulted in a sustained high dividend yield, often above 4 per cent, which can be attractive for income-focused investors due to its predictable cash returns. 

However, in the market’s interpretation, such a high dividend yield in a technology business is often associated with lower reinvestment intensity, which tends to influence how the stock is valued over time.

As a result, OFSS has typically traded at relatively moderate valuation multiples compared to faster-growing software and IT services companies, except in the past few years. 

The capital allocation approach, which prioritises dividend distribution over reinvestment-led growth, reduces the visibility of long-term earnings compounding. 

This makes the stock less compelling for investors who primarily seek scalable, reinvestment-driven growth, while still positioning it as a steady, cash-generating business more suited to income-oriented investing rather than aggressive compounding strategies. 

7. Conclusion and Outlook: A High-Quality but Low-Growth Narrative:

In conclusion, OFSS is a high-margin, financially strong, and consistently profitable software company with exceptional cash flow generation. However, it operates more as a mature cash-distribution business than a reinvestment-driven growth engine. 

In my personal opinion, on a risk-reward basis, OFSS is less attractive for retail investors when compared to comparable listed software services firms in India that offer stronger reinvestment-led growth visibility.

While the business remains fundamentally sound and continues to deliver steady dividends, its long-term investment appeal depends heavily on investor expectations. Those seeking stability and income may still find value here. 

However, for growth-focused investors, the limited reinvestment strategy and mature nature of the business make it a relatively less interesting opportunity.

A good business is not always a high-growth investment opportunity.

This is just for information purposes and should not be construed as investment advice.

 

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References:   

Screener.in - Valuation ratios, cash flows and peer comparison of select MidSmallCap IT companies >

Three screenshots >

 

 

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P.S. dated 10May2026: The following notes are added after the above article was published on 10May2026:

10May2026:

My personal view as on 10May2026:

If you are a growth investor, it's better to focus on mid- and small-cap stocks in India's Information Technology (IT), rather than focusing on slow-growing and AI-disrupted giant IT stocks in the Indian listed space.

Four such stocks worth considering are:

LTM Ltd (it's big IT stock, but on the lower rung compared to giant IT stocks) -- showing decent growth in revenues and profits

Persistent Systems -- high growth in revenues and  profits; though valuations are rich and the stock is priced to perfection

Zensar Technologies - high institutional ownership; belongs to RPG Group; moderate sales growth in recent quarter; volatile and high-risk stock

Intellect Design Arena - high revenue growth in the past 5 qurters; net profit growth almost flat in the past 3 years; low dividend and high reinvestment in capex; likely to generate good margings in future; though FPI / DII stake is high, retail holding is on the higher side making it a high-beta and high risk stock

This is just for informational purposes and should not be construed as investment advice. It's safe to assume the author has vested interest in financial markets and the stocks discussed. 

Valuation ratios of four companies > screenshot >


 

 

 

 

 

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SEBI Classifies "Significant Indices" Based on Rs 20,000 Crore AUM 07May2026

SEBI Classifies "Significant Indices" Based on Rs 20,000 Crore AUM 07May2026

 

Follow @vrk100

 

(This is my 509th blog since 2010. Over the years, I have covered global financial markets, with a focus on India, and continue to share insights to help readers understand complex topics in simple language.

The views expressed here are for information purposes only and should not be construed as a recommendation or investment advice. While the author is a CFA Charterholder with nearly 25 years of experience in financial markets, this content is intended to share general insights and does not constitute financial guidance. 

Please consult your financial adviser before taking any investment decision. Safe to assume the author has a vested interest in stocks / investments discussed if any.) 

SEBI has now formally identified 48 market indices — including familiar names like Nifty 50, Sensex and Bank Nifty — as 'Significant Indices' that will be subject to stricter regulatory oversight. 

If you invest in mutual funds, the index your fund tracks is now under SEBI's watch. Here's what that means for you.

 

1. What Are Significant Indices?

India's capital market regulator, Securities and Exchange Board of India (SEBI) has introduced a formal framework to identify “Significant Indices” under its 2024 regulations.

These are market indices that are widely tracked by mutual funds and influence large volumes of investor money in India’s securities market.

SEBI’s move aims to improve transparency, accountability and governance among index providers whose benchmarks play a major role in investment decisions. 

 

(article continues below) 

------------------- 

Related blogs:

Check Update 07May2026 with charts 127 to 132: Indian Economy data bank: Additional data charts: Top 5 AMCs offering ETFs / Index funds by AUM; and ETFs tracking Nifty 50 index 

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2. How Does an Index Become Significant?

According to SEBI, an index will qualify as a “Significant Index” if the average cumulative Assets Under Management (AUM) linked to it exceeds Rs 20,000 crore across mutual fund schemes for six consecutive months. 

SEBI will periodically review which indices qualify as significant indices. The review will happen twice every year, based on data ending June 30th and December 31st.

To ensure stability, SEBI applies a "sticky" rule: once an index is labeled significant, it cannot leave the list unless its AUM stays below that Rs 20,000 Crore mark for three full years.

This rule prevents frequent additions and removals and ensures stability in the regulatory process. 

 

3. Why This Matters for Investors:

Indices are not just market indicators anymore. Today, many mutual funds, exchange traded funds (ETFs) and passive investment products directly track benchmark indices such as Nifty 50, Bank Nifty or BSE Sensex, involving thousands of crores of investors' money.

SEBI’s framework seeks to ensure that these benchmarks are managed fairly, transparently and consistently.

 

4. Registration Requirement for Index Providers:

SEBI has directed index providers managing these “Significant Indices” to apply for registration within six months from the circular date.

Currently, index providers, NSE Indices Ltd, BSE Index Services Pvt Ltd (BSE Indices) and CRISIL are not yet registered with SEBI as index providers. 

Now, they will have to register with SEBI as "market intermediaries" under the new "index providers" category. 

SEBI has also said that any organisation already registered with it — such as a stock exchange — cannot continue running its index business as just one of its internal departments. 

Within two years, these organizations must move their index operations into a separate company so that the management of indices remains independent and free from possible conflicts of interest. 

5. Which Indices Are Included?

SEBI has published a list of 48 significant indices. These include major equity indices such as BSE Sensex, Nifty 50, Bank Nifty, Nifty 500 and Nifty Next 50.

The list also includes debt, hybrid, government securities, infrastructure, manufacturing, banking, PSU debt and sectoral indices tracked heavily by mutual funds.

Break-Up of the 48 Significant Indices:

The SEBI circular lists 48 indices across three index providers — nine from BSE Indices, eight from CRISIL and 31 from NSE Indices.

These indices are divided into four categories:

15 equity broad market indices
9 equity sector indices
18 debt indices
6 hybrid indices

Chart 1: List of Signficant Indices under Equity broad market and Equity sector category (identified for the period: Jul2025-Dec2025) >

Chart 2: List of Signficant Indices under Debt and Hybrid category (identified for the period: Jul2025-Dec2025) > 

 

 

Examples showing why an index is a significant index:

1) The assets under management (AUM) of passive funds that are tracking Nifty Next 50 index as on 31Mar2026 are as follows:

ETFs: Rs 14,694 crore
Index funds: Rs 21,520 crore
Combined for passive funds: Rs 36,214 crore 

As the combined AUM crosses Rs 20,000 crore threshold set up by SEBI, Nifty Next 50 index is a significant index as defined by SEBI.

It may be noted any active mutual funds benchmarking against this index would push this total even higher.

While SEBI's initial classification was based on the average AUM from the July-Dec2025 period, current data as of Mar2026 confirms that these indices continue to hold their 'Significant' status by comfortably sitting above the Rs 20,000 crore threshold. 

2) The assets under management (AUM) of passive funds that are tracking Nifty CPSE index as on 31Mar2026 are as follows:

ETFs: Rs 20,592 crore
Index funds: nil
Combined for passive funds: Rs 20,592 crore 

As the AUM from ETFs alone crosses the Rs 20,000 crore threshold, the Nifty CPSE index qualifies as 'Significant' regardless of the lack of Index Funds participation.

Note: While the data above focuses on passive funds like ETFs and Index Funds, any Active Mutual Funds using these as a primary benchmark also contribute to the total AUM count under SEBI rules. 

 

Beyond regulation, the above two lists also show where Indian mutual fund investors (both households and corporates) are increasingly investing their money — from broad market indices like the Nifty 50 to sector-specific and debt benchmarks, reflecting diverse investment choices.

 

6. Impact on India’s Financial Markets:

The new framework reflects the growing importance of passive investing in India. As more investors put money into index funds and ETFs, benchmark governance becomes critical for market integrity.

7. Conclusion:

SEBI's identification of 48 Significant Indices marks a pivotal moment in India's investment landscape — for the first time, the benchmarks that quietly govern trillions of rupees of investor money will be formally regulated. 

For mutual fund investors, this means greater confidence that the index your fund tracks is governed with transparency and accountability. 

 

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References:   

SEBI circular 05May2026 on Significant Indices

SEBI registered intermediaries - like, credit rating agencies, AIFs, brokers, DRs, FPIs, investment advisers, MFs, REITs, etc. - market infrastructure institutions - 

SEBI registered intermediaries - by typing the SEBI Registration Number or actual name of a particular intermediary (like, a broker or investment adviser) in the column, you can check whether it's actually registered with SEBI

Nifty Passive Insights quartelry / monthly

Nifty Passive Insights PDF for Apr2026 (with data as of 31Mar2026) - AUM data of several Significant Indices from NSE / Nifty Indices stable can be found in the PDF

 

 

 

A Simple Guide to the Nifty India FPI 150 Index 04May2026

A Simple Guide to the Nifty India FPI 150 Index 04May2026

 

Follow @vrk100

 

(This is my 508th blog since 2010. Over the years, I have covered global financial markets, with a focus on India, and continue to share insights to help readers understand complex topics in simple language.

The views expressed here are for information purposes only and should not be construed as a recommendation or investment advice. While the author is a CFA Charterholder with nearly 25 years of experience in financial markets, this content is intended to share general insights and does not constitute financial guidance. 

Please consult your financial adviser before taking any investment decision. Safe to assume the author has a vested interest in stocks / investments discussed if any.) 

The article is about Nifty India FPI 150 Index, introduced by India's premier exchange, NSE India last year. NSE lists the index as a 'Broad Based' index.

 

1) Introduction and Importance

The Nifty India FPI 150 Index represents a carefully selected group of Indian stocks that are most accessible to foreign portfolio investors (FPIs). 

Drawn from the broader Nifty 500 universe, it focuses on companies with strong liquidity, high free-float and sufficient room for foreign ownership. 

For global investors interested in India growth story, this index helps track where international money is most likely to be invested. It serves as a useful benchmark for understanding both market trends and foreign investor preferences.

2) Understanding “Foreign Investible Free-Float Market Capitalisation”

Free-float means only the shares that are actively available for buying and selling in the market. Not all shares qualify, because some are held by promoters, governments or insiders who do not usually trade them.

So, free-float market capitalisation = share price × shares that are actually tradable.

Foreign investible:

Even within free-float shares, foreign investors cannot always buy the entire portion. There are regulatory limits on how much foreign investors can hold in a company, and these limits differ by sector and sometimes by individual companies.

For example, in private banking stocks like HDFC Bank or ICICI Bank, foreign ownership is allowed only up to 74 per cent, and in practice the actual foreign holding may already be close to these limits. 

In the insurance sector, rules have recently changed. As of 02May2026, foreign investment in most insurance companies in India is now allowed up to 100 per cent. 

However, Life Insurance Corporation of India (LIC) remains an exception, with a foreign ownership cap of 20 per cent, meaning only a small part of its shares are available to foreign investors.

So, "foreign investible" refers to the portion of freely tradable shares that foreign investors are still allowed to buy after accounting for such sector-specific and company-specific ownership limits.

Putting it all together:

Foreign investible free-float market capitalisation means the value of shares that are both:

> freely tradable in the market, and
> available for foreign investors to invest in

Simple example:

Imagine a company with a market cap of Rs 10,000 crore:

Only Rs 4,000 crore worth of shares are free-float (actually tradable in the market).

Out of that, only 1,500 crore worth is still available for foreign investors due to ownership limits.

In this case, the foreign investible free-float market capitalisation is Rs 1,500 crore.

3) What the Nifty India FPI 150 Index Tracks

The index tracks the performance of 150 leading stocks chosen based on their foreign investible free-float market capitalisation. 

This means it prioritises companies where foreign investors can easily buy and sell shares without significant restrictions. 

To be included, stocks must meet strict criteria related to trading activity, size, and foreign investment limits, ensuring the index remains both liquid and investible. 

 

4) How the FPI 150 Differs from the Nifty 500

The Nifty 500 is a broad market index that represents 500 of the largest and most liquid Indian companies. Its purpose is to reflect the overall Indian equity market without considering investment constraints or who is investing.

The Nifty India FPI 150, in contrast, is a filtered version of this universe designed specifically for foreign investors. 

It selects stocks not only based on size and liquidity, but also on how much of the company is actually investible for foreign capital, after accounting for regulatory limits and existing foreign ownership.

This leads to key differences in composition and weights. For example, Reliance Industries has a higher weight in the FPI 150 than in the Nifty 500 because it combines scale with relatively better foreign investability. 

On the other hand, a few large Nifty 500 constituents like State Bank of India do not appear in the top ten stocks list of FPI 150 due to structural foreign ownership constraints. 

Even stocks like HDFC Bank and ICICI Bank have lower weights in the FPI index because a large part of their foreign investible room is already utilised.

In simple terms, the Nifty 500 shows market size and representation, while the FPI 150 shows where foreign capital can actually participate.

5) Index's Portfolio Characteristics

Methodology: Foreign investible free-float market cap

No. of Stocks: 154

Index launch Date: 16Aug2025

Index base Date: 03Oct2022

Base Value: 1000

Calculation Frequency: Real-Time

Index Rebalancing: Quarterly (March, June, September, December) 

 

As of 30Apr2026, it temporarily includes 154 stocks due to the demerger of Vedanta Ltd into five companies. 

At present, there are no passive funds such as ETFs or index funds tracking this index. 

 

6) Sector Allocation and Top Stocks:

Financial services and oil & gas stocks dominate the index.

Chart showing top sectors and top stocks in the index >

 

7) Performance and Risk Snapshot: 

Data as on 30Apr2026:

Total Return: 

-5.2% YTD
+4.1% 1-year

Standard Deviation:

14% 1-year

8) Summary 

The Nifty India FPI 150 Index shows the most investible Indian stocks from a foreign investor’s point of view. It focuses on large, liquid companies that are easier for global investors to access and trade.

However, it is not yet available as an investible product like an exchange traded fund (ETF) or index fund.

For everyday investors, it still offers a simple way to understand how India’s stock market is structured and which sectors and companies attract global capital. 

 

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References:   

Nifty Indices Research Papers

Nifty Indices methodology document PDF

Nifty Indices factsheets 

Nifty India FPI 150 index 

Nifty India FPI 150 factsheet PDF 

 

Screenshot of Nifty India FPI 150 factsheet PDF  for Apr2026 >