“Markets are celebrating in advance,” Advani told ET Now. “We are the flavour of the month, but a lot of liquidity has shifted back to the US — especially into tech majors riding the AI wave. The likes of Nvidia, Oracle, and OpenAI are drawing global institutional capital, including from India, leading to heavy FII outflows over the last three to six months,” he said.
Industrial push will bring FIIs back
According to Advani, a turnaround in India’s industrial heavyweights including cement, aluminium, and steel will be the trigger for foreign investors to re-enter.
“Once we start showing numbers on the industrial growth side, money will start coming back in,” he noted. “That will nudge the broader market upward. Right now, we’re a follower market, not a leader.”
AI euphoria: Opportunity or bubble?
Commenting on the global AI frenzy, Advani said the sector is not yet in bubble territory but warned that only a few players will emerge as true winners.
“All these companies are investing billions into each other. It’s like the X-Prize concept — out of five contenders, two will win big, while others will just survive. Institutional investors are betting on all of them, hoping one or two become multi-baggers,” he explained.
India missed the AI bus, for now
Advani believes Indian IT companies have struggled to adapt to the AI revolution and must reinvent their business models to stay relevant.“Our IT companies aren’t part of this global AI play. They need to pivot — become the back-end for US firms or develop new remote service models,” he said. “AGI (Artificial General Intelligence) means computers will soon code themselves, so the old outsourcing model won’t work.”
He added that challenges such as H-1B visa restrictions and rising costs have forced Indian IT firms to rethink growth strategies.
“Look at Infosys — even after a buyback, its share price is below the buyback price. That tells you the market sees structural issues,” he said.
Data centres and new energy the next global focus
While data centres are gaining traction, Advani said India’s participation remains limited as the US and Europe push for domestic infrastructure backed by new-age nuclear microgrids.
“Trump has already asked for data centres to be built in the US. The challenge there is power. The trend now is small nuclear plants powering these centres — that’s where the money is going,” he added.
Markets need big movers: IT, banks, Reliance
Advani pointed out that India’s index heavyweights — IT, banks, and Reliance Industries — must move in tandem for a breakout.
“IT and banks together form about 40% of the index. Until they move, markets will remain range-bound. Nifty keeps testing 25,000 but lacks fresh triggers,” he said.
He also noted that while domestic savings remain strong, the IPO rush is soaking up liquidity.
“There’s plenty of money, but it’s getting absorbed in new issues. Until the FIIs — the ‘goras’, as we call them — return, the breakout will have to wait,” Advani concluded.