New Delhi, Sep 24 (IANS) India’s large‑cap segment offers relatively attractive valuations versus mid and small‑caps, and buying opportunities emerge in mispriced pockets of the top 100 companies especially in banks, infrastructure NBFCs, power and energy‑transition, a report said on Thursday.
The report from Omniscience Capital noted sustained flows into small-, mid- and multi-cap schemes and continued selling pressure in large-cap funds, adding that concentration of equity inflows into mid and small caps is concerning given their premium valuations.
“Opportunities for long-term investing are emerging in mispriced pockets of the top 100 companies, which could potentially deliver better performance over the next three to five years,” said Ashwini Shami, President and Chief Portfolio Manager, Omniscience Capital.
Ahead of the festive season, banks, infrastructure NBFCs, HFCs, power, select energy-transition stocks, business services, EPC and select infrastructure names offer strong growth outlooks at more attractive valuations, the report said.
Large-cap stocks remain broadly investable, aside from overvalued areas facing structural AI or macroeconomic headwinds.
Small-cap index is fully priced, but rigorous bottom-up selection still yields excellent stock-specific opportunities from a universe of nearly 1,000 companies.
Persistent US inflation—currently above 3 per cent and facing further upward momentum from the US-Iran conflict—has led the Federal Reserve to hike interest rates. Consequently, US 10-year Treasury yields surged to 5 per cent, hitting nearly 19-year high last seen in July 2007.
The report said that another Fed rate increase remains likely before year-end, potentially at the December meeting. Meanwhile, elevated oil prices and a weaker rupee continue to fuel persistent inflation in India, increasing the probability of an RBI rate hike at its next meeting.
“While FIIs turned net buyers in the months of July and August 2026, the quantum of net buying was significantly lower than the net selling observed over the preceding four months,” said the report.
FIIs turned net sellers again in September as US Treasury yields rose 20-30 basis points over the preceding two weeks. Continuous outflows from large-cap mutual fund schemes have also offset recent FII buying.
—IANS
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