Domestic mutual fund inflows of $21B stabilized India’s stock market, with $50–70B expected in 12 months, supporting long-term growth.

Jefferies reports that mutual fund inflows of $21 billion in the first five months of the fiscal year are stabilizing India's stock market amid heavy outflows, preventing a collapse despite high equity supply. The firm expects $50–70 billion in equity inflows over the next 12 months, driven by domestic investors through mutual funds and SIPs, which will absorb supply and support market stability. While markets may trade sideways for now, Jefferies maintains that India's long-term growth story remains strong, bolstered by structural reforms, rising investor participation, and upcoming economic momentum from recent GST cuts. A potential rally is anticipated in 2026.