The shares of several smallcap and midcap companies strongly tumbled on June 19, pushing the broader market indices sharply in the red for the third consecutive session. The Nifty Midcap index dropped over 1.7 percent (more than 1,000 points) to hover around 57,107, while the Nifty Smallcap index fell over 2 percent (nearly 400 points) to stand at 17,982 in the afternoon.
The broader market indices are currently underperforming the benchmarks, which were down in the red with marginal losses. Sensex dropped around 40 points (0.046 percent) to 81,407, while Nifty 50 fell 0.096 percent (around 24 points) to 24,788 in the afternoon.
"The recent correction in small- and mid-cap stocks is driven by profit booking and stretched valuations after a sharp rally, alongside concerns over rising crude prices due to geopolitical tensions. These factors have heightened inflation worries and dampened market sentiment. Investors should adopt a selective, long-term approach—focusing on quality stocks with strong fundamentals, reasonable valuations, and credible promoters. Avoid momentum-driven or overvalued names. Rebalancing portfolios by booking partial profits and reallocating to high-conviction ideas is advisable. Use market dips to accumulate fundamentally sound businesses, maintain diversification, and stay patient to navigate short-term volatility effectively," said Ajit Mishra, SVP of Research at Religare Broking Ltd.
Top losers on Nifty Midcap index:
Bank of India was the top loser on the midcap index, dropping nearly 4 percent to trade at Rs 115 apiece. This comes as PSU bank stocks saw significant decline today, with Nifty PSU Bank index falling over 2 percent to hover around 6,730.
LIC Housing Finance and Supreme Industries shares followed, falling around 4 percent each. Rail Vikas Nigam Limited (RVNL), SBI Cards and Union Bank of India shares plunged over 3.6 percent each. Indian Renewable Energy Development Agency (IREDA) and Premier Energies shares fell over 3.4 percent each.
Phoenix Mills and Hindustan Zinc shares fell over 3 percent each, while NTPC Green, Polycab, Vodafone Idea and BHEL fell nearly 3 percent each.
Other notable midcap stocks which recorded significant losses include Godrej Properties, HUDCO, GMR Airports, Yes Bank, National Aluminium, Suzlon Energy, CONCOR, NMDC, Mankind Pharma, SAIL, Coforge and more.
Top losers on Nifty Smallcap index:
On the smallcap index, Cyient DLM shares were the top loser. The stock tanked over 5 percent to trade at Rs 1,288 apiece. RailTel Corporation of India and Reliance Power shares followed, dropping over 4.6 percent each. FirstCry, Hindustan Copper and Titagarh Rail Systems shares fell over 4 percent each.
BEML, Amber Enterprises, NBCC and RITES plunged over 3.6 percent each. Other notable smallcap stocks which recorded significant losses include Sagility India, IRCON, IKS, Welspun Corp, CAMS, Nuvama, IGL, PNB Housing Finance, IIFL Finance, GRSE, Laurus Labs, NCC, Inox Wind, CDSL, Anant Raj, Angel One, MGL, Delhivery and more.
Notably, smallcap and midcap stocks have shown significant volatility recently. According to a latest study by Bajaj Finserv AMC, the market capitalisation of India's small-cap segment jumped fivefold from Rs 17 lakh crore in 2017 to Rs 92 lakh crore by the end of 2024.
"Second half of FY25 witnessed a correction in small caps, creating an opportunity to accumulate quality small caps at better valuation. As of April 2025, most small caps continue to trade below their 52-week highs, making the segment appealing from a valuation standpoint. While the small-cap index gained only 4% since FY24, profit after tax (PAT) grew by 38%, highlighting the segment’s unrealized value5. Despite the price correction, small-cap profits rose to ₹29,941 crore in FY25 from ₹21,669 crore in FY246. Moreover, 74% of the top 250 small-cap companies reported a double digit returns on capital employed (ROCE), indicating strong underlying fundamentals," it said.
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