Indian markets have offered many value buying options amid panic sell-off led by COVID-19 lockdowns. While FIIs and Indian mutual funds sold heavily in March and first two weeks of April, the situation improved in the second half of April. During May 2020, we have witnessed recovery in many sectors and investors engaged in bottom fishing.

As per market data, the selling amounted to Rs 6,883 crore in April and Rs 61,973 crore in March. In February, the net inflows in Indian stocks stood at Rs 1820 crore. So far in May, we have witnessed inflow of Rs 9,000 crore in Indian equities.

Talking about FPI investments in Indian equities, Asutosh Mishra, head of research at Ashika Stock Broking said, “FPIs are selectively positive on only few Indian equities in the current month. Positive FPI flow in the month of May is only due to strong participation by FPI in mega HUL block deal of Rs 25,000 crore on May 7. FPIs were net sellers in the Indian equity market in last 12 out of total 15 trading sessions in May.”

Many companies that have been favorite of large investors, are available at very reasonable valuations. Stocks like Bajaj Finance have declined from near 52-week high of Rs 4880 on February 20 to Rs 1865 touched on 24 May. Bajaj Finance is slightly high risk as the company is in finance sector but investors with high risk appetite can start buy at current levels.

"Attractive valuation after the sharp correction in the equity markets this year, and significant depreciation of Indian rupee against USD provided FPIs a good entry point," said Himanshu Srivastava, Senior Analyst Manager Research, Morningstar India.

Arjun Mahajan, head of Institutional Business at Reliance Securities, added that positive inflows in May could be due to liquidity infusion by the US, Japan, UK, EU and other countries. Cheap valuations of Indian stocks could be the other factor for the inflow, he added.