As per data from primeinfobase.com, the share of stake held by retail investors in companies listed on NSE went up to 7.53 percent as on June 30 from 7.51 percent as on March 31. In value terms, retail holding stood at Rs 34.25 lakh crore as on June 30.
The Nifty Midcap 150, Nifty Smallcap and Nifty 500 indices are on track to rise for a fourth consecutive month. Many experts believe that without an earnings pickup, elevated broader market valuations may constrain returns.
Retail shareholders pared their exposure to smallcaps and midcaps during the three months ended March amid the market downturn.
Experts say that India-centric companies have led this move, as they’re shielded from global disruptions.
79 listed PSU companies have disclosed their shareholding data so far for Q4, with foreign institutional investors (FIIs) increasing their stakes in 52 percent of the companies.
Market experts have been suggesting that investors rush to the safety of fairly valued large-caps given the ongoing tariff turbulence.
The one-year forward price-to-earnings (P/E) ratios for the BSE Midcap and Smallcap indices stands at 24.3x and 20.4x, respectively - down from recent peaks of 32x and 27x, and slightly below 10-year averages of 27.94x and 21.44x
Currently, 100 stocks in the BSE SmallCap and 15 in the BSE MidCap index are delivering single-digit returns over both one-year and three-year periods even as several stocks have breached key technical support levels.
The broader markets snapped their multi-day losing streak as investors went bottom-fishing, leading to the Nifty Smallcap index gaining over 1 percent intraday.
The ongoing sell-off in the broader markets continued as smallcap and midcap stocks saw exacerbated selling pressure.
According to Moneycontrol data, an aggregate of 683 firms in the BSE SmallCap Index reported a 7.1 percent increase in revenue for Q3, marking the seventh consecutive quarter of single-digit growth and the 13th straight quarter of sequential single-digit growth.
For 2025 so far, the Nifty Smallcap 100 index has tanked 17.58 percent, while the midcap index has cracked 11.82 percent.
Kotak Institutional Equities warns that small-cap and mid-cap stocks are likely to be hit the hardest in the ongoing market correction.
From its lifetime highs, the Nifty Smallcap 100 index has tanked 22 percent, while the Nifty Midcap 100 has fallen 18.9 percent.
Year-to-date, in rupee terms, the BSE MidCap and SmallCap indices have lost around 11 percent and 13 percent, respectively. From their September 2024 peak, both indices have fallen over 20 percent, entering bear market territory.
In 2024, the benchmarks Sensex and Nifty recorded gains of over 8 percent each, while the BSE Midcap and BSE SmallCap indices surged by 26 percent and 29 percent, respectively.
Analysts suggest that the ongoing rally could persist temporarily, but January’s earnings season may bring renewed disappointment
Despite today’s rally, small- and mid-cap indices have struggled more than the frontline stock since late September, with the respective indices falling 12% and 11%, respectively, compared to the Sensex and Nifty's slightly smaller declines.
In the small-cap space, the correction has been across sectors like engineering, IT and textiles while the mid cap space has seen bulk of corrections happening across defence, telecom and banking.
During market corrections or downturns, midcaps and smallcaps tend to decline sharply as a result of their high beta nature.
So far in September, retail investors have sold shares over Rs7,500 crore, marking the largest sell-off since March 2024. Meanwhile, domestic investors bought shares worth around Rs 17,421 crore while foreign investors bought Rs 55,855 crore worth of shares in September.
Rajiv Batra said India has rallied nearly 660% in last two decades, while US has gained only 440%, and this outperformance has come largely due to India's earnings potential.
The NSE Midcap 100 and Smallcap 100 indices have jumped 27 percent and 26 percent, respectively, so far this year.
In June, the BSE Midcap index fell in just four sessions: June 4, June 19, June 21, and June 25. Similarly, the BSE SmallCap index experienced declines on only three days: June 4, June 19, and June 25. On all other days, both indices traded higher.
In April so far, the BSE MidCap index rose 5.7 percent, its highest since December 2023, while the BSE SmallCap Index surged over 9.7 percent, marking its biggest jump since February 2021