Inflows from global funds into Indian equities will significantly rise if corporate governance standards improve, said Jen Sisson, CEO of the International Corporate Governance Network (ICGN).
Foreign portfolio investors (FPIs) want India to “adopt global best practices in the governance of listed entities,” said Sisson, a former Goldman Sachs Asset Management executive.
Global Correlation
FPI interest in Indian markets, according to Sisson, is greater than ever. Several major Wall Street brokerages have predicted a rerating of Indian stocks in 2026.
Citing the examples of Japan and the recent heightened inflows into South Korea, she said the flow of long-term capital is strongly correlated to better corporate governance and this is a proven pattern.
Roadmap for Improvement
ICGN is looking forward to collaborate with Sebi to enhance corporate governance in India, and has met with Sebi officials, Sisson said.
With regard to improvement in the overall quality of governance and disclosures, India has room to adopt international best practices, said Sisson. “ISSB standards and the global sustainability-related financial disclosures are to be adopted…”.
ICGN has onboarded Quantum Advisors, the sponsor of Quantum Mutual Fund, as the first signatory to its global stewardship code in India. ICGN signatories involve global investors with cumulative assets of above $90 trillion.
Quantum founder Ajit Dayal said it has always avoided investing in firms with governance concerns. “From our perspective, 30% of the index (Nifty) is uninvestable,” he said.
At present, FPI assets in India are around $1 trillion. After relentless outflows in 2025, FPIs turned net buyers of Indian equities in October. The trend is continuing in November, with larger allocation being in primary markets.
“While primary demand continues to support the market, the return of positive secondary market flows indicates easing selling pressure among foreign investors,” IIFL Securities said a recent note.