With investors weighing the resilience of small caps against the valuation comfort offered by large caps, value investing within the Nifty 50 is gaining renewed attention. The index’s revised methodology seeks to identify relatively inexpensive companies among India’s largest and most liquid businesses, using earnings, sales, book value and dividend yield as key valuation signals.
In an interview, Chintan Haria, Principal – Investment Strategy at ICICI Prudential AMC, explains the investment case for the strategy, the risk of value traps, the impact of sector biases and the trade-offs involved in a valuation-led approach. He also discusses why the strategy may be better suited as a satellite allocation for investors with a five-year or longer horizon.
