Umeshkumar Mehta, Chief Investment Officer of SAMCO Mutual Fund, has called for a comprehensive review of overseas investment limits for mutual funds. According to reports from Business Standard, Mehta believes this regulatory action would allow Indian investors to participate in global themes such as artificial intelligence, semiconductors, and biotechnology that are currently difficult to access through domestic markets. The current $7 billion overseas investment limit has been fully utilized, restricting fresh investments into international mutual funds and feeder funds. As reported by Value Research Fund Advisor, all international mutual funds in India have now stopped accepting new SIP registrations, with the last fund - Baroda BNP Paribas Aqua - stopping new registrations on July 23, 2026. When this tracker began in early June, 12 funds were open to a new SIP; today, none are.
As reported by Business Standard, the key drivers for markets in the second half of CY2026 are expected to be corporate earnings and easing cost pressures. Mehta noted that profitability should improve as raw material costs continue to soften and geopolitical disruptions on supply chains gradually recede. Foreign Portfolio Investor (FPI) flows are identified as another important factor to watch, with India's macroeconomic fundamentals remaining strong, potentially leading to foreign investors turning more constructive on Indian equities.
According to Business Standard, the rise of Domestic Institutional Investors (DIIs) has been one of the most significant structural changes in India's capital markets. In December 2024, DIIs ownership of Indian equities surpassed that of FPIs. Mehta emphasized that while it would be incorrect to say FPIs will become irrelevant in the next 5 years, the balance of influence has shifted, with strong domestic inflows helping cushion the impact of FPI selling. FPIs continue to play critical roles in price discovery, market liquidity, and connecting Indian markets with global capital pools.
As reported by Business Standard, from a long-term perspective, aerospace and defence ecosystem companies present compelling opportunities, with potential value creation from companies supplying components to global aerospace and defence OEMs. However, the IT sector remains relatively cautious due to rapid AI advancement creating uncertainties for traditional IT companies. Mehta noted that Indian markets still offer significant opportunities for active fund managers, with ample scope for stock selection and alpha generation, though delivering consistent outperformance will become more challenging as markets mature.
According to Business Standard, retail investor behavior has become more mature, with investors focusing on long-term wealth creation rather than reacting emotionally to short-term events. The continued SIP flows demonstrate this resilience, highlighting that investors are continuing with disciplined investment plans. Retail investors have evolved from trying to time the market to trusting a disciplined, long-term investment approach, with investors today being far more informed and diversified across various strategies based on their financial goals.
