India, Sept. 27 -- India's equity market has entered a phase where valuation dispersion matters almost as much as headline index valuations. The Nifty 50 is trading around the low-20s on earnings, while recent market commentary has put the Nifty Midcap and Smallcap indices at roughly 33x and 32x earnings, respectively. That creates a wide gap between the valuations of established large companies and businesses where investors are paying for future growth.

This premium is being supported by several factors. Domestic equity flows remain strong, with equity mutual funds receiving Rs.29,329 crore in August 2026 and SIP contributions reaching Rs.32,297 crore, according to AMFI data reported by Reuters. Mid-cap and small-cap funds accounted f...