Rajesh Jain of Pranav Securities is of the view that investors should be cautious with realty and Indiabulls Real Estate at current levels.

Jain told CNBC-TV18, "Despite the aggressive pricing, we have seen DLF and the financial might, the issue has sailed through very well and I think it augurs well because it has set a very aggressive benchmark for valuations in the entire sector. A lot of people are equating it to a bubble but like I was discussing with you, you don’t become so big in India unless you really have some merit and I think DLF has a lot to prove for the price that it is asking for itself and we have an issue that has subscribed over two times and I think the proof of the pudding is right there."

He further added, "But having said that, the real estate you have to first of all check out whether the signs of fatigue that you have seen in the auto sector on account of interest, will interest finally impact grassroot demand. If it happens in the auto sector then it has to percolate to the white goods sector and then finally to the real estate sector. The feedback from the ground doesn’t seem to be very definitive on that. We have a lot of real estate experts telling us that the real estate sector is feeling the pinch of it whereas if you go speak to brokers and builders some of them are admitting that the price increases have stopped and the calls for fresh buying have slowed down, if not stopped altogether."

"So there is a mixed bag out there. To my mind, my personal view is that any time you see a sector in a froth, it is not the time to enter it, you can certainly put your buys on hold, and if DLF indeed has a froth element in the valuation, then once their issue is over, and after the listing is through, then the froth should start settling down at which point, it is certainly a sector to start getting into."

"For instance, the stock in question that we are discussing is India Bulls Real Estate. When they got the Dadar property, it was widely felt that they have overstretched themselves and overbid. But now that bidding price seems to be a bargain price in the context that an appreciation has taken place over the last one year in the entire real estate space."

"Now, also a lot of real estate plays in corporate developers, I think the real money is to be made by developers and by construction firms and so long as you are ensuring that the stock you buy has a fair amount of exposure to both of them, apart from the quality of the real estate or the land bank that they hold, then you cannot go too wrong because if indeed there is no way you can manufacture fresh land, then over the long-term and if indeed you are investing for the long-term, you cannot go too wrong with land or real estate. So, whether you get in at the top end of the cycle and have to experience pain before you make your appreciation or you get into some momentum appreciation right away, is something, which is probably getting vitiated because of a huge issue like DLF. But aside of that, I think if you choose your plays properly, you cannot go too wrong with real estate."