Of the 743 companies, more than 82 percent or 614 entities are small caps. Mid-caps account for 95 companies, while 34 large-cap stocks, typically considered safer bets, have also shed more than half their value.
The ESM framework, originally meant for small and microcap surveillance, was extended last year to include mainboard companies below Rs 1,000 crore in market cap.
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.
The BSE Smallcap index has 979 constituent stocks and nearly 760 of those were trading higher on May 13, with some of the top gainers in the range of 5-10 percent, even as the benchmark index is struggling to shake off selling pressure.
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.
The amount invested in large caps, in fixed income and in gold will determine your portfolio’s ability to cushion volatile shocks from the portion invested in small caps
From its lifetime highs, the Nifty Smallcap 100 index has tanked 22 percent, while the Nifty Midcap 100 has fallen 18.9 percent.
On Sunday, while speaking at the IFA Galaxy 2025, an event organised by a Chennai-based mutual fund association, Naren advised caution regarding SIP investments in mid- and small-cap stocks
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.
Small and mid-cap stocks have plunged 15 percent amid tightening liquidity and slowing domestic growth, raising concerns about a potential bear market.
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.
India's broader indices BSE MidCap and BSE SmallCap experienced steep corrections in October, declining over 7% and 4%, respectively. This marks the first monthly loss for the broader indices in seven and five months, respectively.
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.