Abakkus Study Reveals Nearly Half of Small-Cap Stocks Down 40% from Highs: Portfolio Impact Explained
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Small-Cap Stocks Plunge 40% Below Highs: What It Means for Your Portfolio
C
CNBC TV18•17-02-2026, 15:09
Small-Cap Stocks Plunge 40% Below Highs: What It Means for Your Portfolio
•Nearly half of India's small-cap stocks are trading 40% below their all-time highs, according to an Abakkus Mutual Fund study.
•The correction offers lower entry prices for retail investors but comes with higher volatility and risk.
•Small-caps' share in India's total listed market capitalization grew from 11% in 2019 to 19% in 2025, expanding their role in portfolios.
•Historically, small-caps delivered higher long-term SIP returns (17% CAGR for Nifty Smallcap 250) compared to large-caps (12% for Nifty 50), but with greater volatility.
•Small-caps provide exposure to emerging sectors like aerospace, EVs, AI, and renewables, with current corrections improving risk-reward profiles.
