We document that Indian firms with foreign promoters (individuals and/or corporations who have been involved since the time of firms’ incorporation) experience lower idiosyncratic volatility (IVOL). This effect is more evident in firms which are prone to more agency problems (that is, firms with poor information environment and freely available cash). Foreign promoters play an important role in reducing IVOL when they own at least 26% equity in a firm so as to be able to influence corporate decision-making. Relative to no-foreign-promoter firms, foreign-promoter firms observe higher stock volatility during periods of high macroeconomic uncertainty. Lastly, we find that foreign-promoter firms are valued higher than no-foreign-promoter firms. Overall, our findings indicate beneficial role of foreign promoters in reducing firm risk and creating firm value.