I am in a similar position. One stock occupies 80% portfolio whereas a meticulous SIP driven MF holding (over 15y) is the rest. And this company was a fluke, not inheritance…
I am in the process of rabalancing the portfolio and the below is my approach. Caveat: it’s just my approach and I don’t know if it will work well…
Step #1: Forget for a moment, the composition of the holdings. Concentrate on the requirements. In my case, it was 3 portfolios - one for kids education, one for emergency expenses and one for retirement earnings
Step #2: Look at how Cipla can fit in these portfolios and at what proportion. In my case, the company I owned fits 25% of kids portfolio and 15% of retirement portfolio
Step #3: Ongoing for me… Switch in tranches from the concentrated to diversified holdings. In my case, is divesting half of the shares into other investments.
Basically, all that I have done is
- Figure out what portfolios I want
- Figure out the composition of the folios and the overlap with your existing holdings. You can account for future growth/risk of Cipla here. In my case, the company I hold is fundamentally strong and in the right industry. Long growth ahead. Hence the 25%+15% allocation. You can use the wisdom in this group to assess and allocate
- Slowly migrate