Significant number of Small-Cap Stocks Are Trading Below their All-Time Highs; offers window of strategic allocation
AHMEDABAD, February 18, 2026: A recent study by Abakkus Mutual Fund cited that nearly 50% of small-cap stocks (with market cap between ₹2000 crore and ₹34,700 crore) are currently trading ~40% below their all-time-high levels. Market resets – like the recent corrections may create a potential accumulation window to acquire high-potential businesses at more sustainable valuations before the next growth cycle begins. This will also create opportunities for the investors to make strategic long – term investment allocations in the small – cap space.
Growing constituency of small-cap in the equity market cap universe
Between CY2019 and CY2025, market capitalization of small-caps has increased from INR 16 trillion to INR 83 trillion, expanding its value by 5.30x. Small-caps have recorded much faster appreciation in their market cap value compared to large-caps (2.55x) and mid-caps (3.89x). The constituency of the category has also expanded from 11% in CY 2019 to 19% in CY 2025 in the market cap universe of Indian equities.
“With nearly half of the stocks of the small cap universe (between ₹2000 crore and ₹34,700 crore market cap) trading below ~40% of their peak, investors have an opportunity to accumulate fundamentally strong businesses at sustainable valuations before the next growth cycle unfolds. A meaningful portion of companies in the ₹2,000 crore to ₹34,700 crore market capitalisation bracket are now available at improved risk–reward levels. Most importantly, exposure to sunrise industries and varied sectors that are difficult to access in the large-cap space, are majorly available in the small-cap category,” said, Vaibhav Chugh, CEO, Abakkus Mutual Fund.
Small-caps offer exposure to emerging and sunrise sectors shaping India’s growth story. These include Aerospace & Defence, Pharmaceuticals & Biotechnology, Electronics Manufacturing Services, EVs & Batteries, AI-led services, Renewables, Medical Devices, Travel & Tourism, and Auto Components. Many of these themes remain underrepresented in large-cap indices.
Performance comparative: Nifty Smallcap 250 versus Nifty 50
Small-caps are typically associated with higher volatility, compared to large-caps. However, the study shows that despite higher standard deviation, Nifty Smallcap 250 SIP returns has delivered superior long-term growth with CAGR of 17% in comparison to the Nifty 50 SIP returns of 12%—since September 2016.
(Disclaimer: The information provided here is investment advice only. Investing in the markets is subject to risks and please consult your advisor before investing.)
(સ્પષ્ટતા: અત્રેથી આપવામાં આવતી તમામ પ્રકારની માહિતી કોઇપણ પ્રકારે રોકાણ/ ટ્રેડીંગ માટેની સલાહ નથી. બજારોમાં રોકાણ જોખમોને આધીન છે અને રોકાણ કરતા પહેલા કૃપા કરીને તમારા સલાહકારની સલાહ લો.)
