Most banks like top private sector banks, NBFC like Bajaj Finance (basically large caps), would be reasonably valued. But for smallcaps there is definitely euphoric market.
Coming to IREDA, imo it is overvalued.
Reason for these valuations maybe
- Newly listed Popular company, hence multiple domestic mutual funds have started building positions.
The SIP inflows are at all time high (every month a new ATH), and the mutual funds need to buy new companies. - PSU, Renewable theme, previous stock returns of PFC/REC.
Things I will watch out for before increasing position:
- Ireda upcoming results. Even though the market has already discounted the previous 55% Profit growth.
- Ireda get’s approval for Navratna. Which again has been promoted by the MD multiple times since the IPO.
- X,Y,Z Ace small cap investor enters IREDA. Quarterly Mutual fund holdings revealed.
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