It’s another red day for smallcap stocks.
On June 19, the Nifty Smallcap index dropped nearly 2% to hit 17,982 in the afternoon session, marking the third straight day of losses. The Nifty Midcap index wasn’t spared either—it slid over 1.7% to hover near 57,107.
This sharp correction across broader markets stands in contrast to the relatively steady benchmark indices. The Sensex was down just 40 points, while Nifty 50 slipped 24 points. But for smallcap and midcap investors, it felt much worse.
Top Losers in Smallcap and Midcap Space
Let’s break down who took the hardest hit:
Smallcap:
Cyient DLM tumbled over 5%, trading at ₹1,288. RailTel and Reliance Power dropped over 4.6% each. Big names like FirstCry, Titagarh Rail Systems, and Hindustan Copper were also down over 4%.
Others like Amber Enterprises, NBCC, RITES, and BEML fell more than 3.6%. Even newer players like Delhivery, Angel One, and CDSL saw steep declines.
Midcap:
Bank of India was the top loser here, falling nearly 4%. Public sector banks were under pressure, with the Nifty PSU Bank index down over 2%.
Stocks like LIC Housing Finance, RVNL, IREDA, SBI Cards, Union Bank, and Premier Energies dropped between 3.4% and 4%. Other notable fallers: Hindustan Zinc, Phoenix Mills, Polycab, and Vodafone Idea.
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Why the Smallcap Selloff?
The correction isn’t coming out of nowhere. After a stellar rally, smallcap valuations had stretched, and profit booking was due. Plus, global market concerns and domestic macro pressures have added to the nervousness.
But here’s the flip side.
According to Bajaj Finserv AMC, the smallcap space might now offer a rare opportunity. Since 2017, the smallcap market cap has surged from ₹17 lakh crore to ₹92 lakh crore by 2024. Despite the current dip, smallcap profits grew 38% in FY25, even as prices stayed flat. Nearly 74% of the top 250 smallcaps posted double-digit ROCE.
Translation? Strong fundamentals, weak prices = value hunting time.
What’s Next for Investors?
If you’re already holding smallcap stocks, this could feel scary. But zoom out, and the story gets more hopeful. With many smallcaps still below their 52-week highs, this correction might be a golden entry point for patient investors.
As always, stick to quality. Don’t chase momentum. And if you’re picking up smallcaps on the dip, look for solid balance sheets and high ROCE.
Disclaimer:
This article is for informational purposes only and does not constitute investment advice. Please consult a certified financial advisor before making any investment decisions.
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