India’s state-run banks are bucking a broader foreign pullback from the country’s equities, drawing inflows as lenders offer better valuations and stronger growth prospects. Foreign investors increased their stake in top state-run lenders including State Bank of India Ltd., Bank of Baroda, Canara Bank Ltd. and Punjab National Bank to the highest in at least a year, shareholding data of as Dec. 31 show. The optimism has extended into 2026, with a gauge tracking these companies gaining 12% from the start of the year to emerge as the best performing sectoral index.