Prashant Jain: Small-Mid Caps Still Expensive, Largecaps Offer Better Risk-Reward

• Veteran investor Prashant Jain indicates market pain persists, especially in small and midcap segments, which are still expensive.
• He believes largecap stocks, though not cheap, have reached fair value, offering a better risk-reward for 11-12% Nifty returns over 3-5 years.
• Jain warns of increased pessimism if investors face prolonged low returns, impacting investment flows due to unmet high expectations.
• New investors post-COVID, unfamiliar with market cycles, contributed to inflated valuations, mistaking recent rallies as permanent.
• Increased competition from new business models and capital inflows will limit margin growth, advising caution on IPOs and focusing on fundamentals.

Why It Matters: Prashant Jain advises patience, favoring largecaps for better risk-reward, as small-mid caps remain overvalued.