Kotak Institutional Equities has ceased to recommend Indian mid-cap companies as it finds limited upside potential following the significant surge in the mid-cap index this year. The rally, driven by irrational exuberance among investors, has raised concerns about a potential market correction. Most of the stocks in Kotak’s model mid-cap portfolio are currently trading near their fair values. The brokerage has found limited opportunities for significant upside potential outside of the banking, financial services, and insurance sector. Kotak has also raised concerns about the quality of certain stocks due to weak execution and governance in the investment sector.