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Small-Cap Market Faces ₹4 Lakh Crore Erosion in 2025
The BSE Smallcap Index has fallen more than 4% in calendar year 2025, resulting in an estimated ₹4 lakh crore erosion in small-cap market capitalisation. Analysts point to stretched valuations, retail leverage, and rapid profit-taking as key contributors to the decline. The weakness has created pressure on small-cap and mid-smallcap-focused mutual funds, many of which now underperform their benchmark counterparts.
Regulators are monitoring the situation closely as volatility rises across high-risk pockets of the market.
Tags:
- markets
- smallcaps
negative
Small-Cap Market Faces ₹4 Lakh Crore Erosion in 2025
The BSE Smallcap Index has fallen more than 4% in calendar year 2025, resulting in an estimated ₹4 lakh crore erosion in small-cap market capitalisation. Analysts point to stretched valuations, retail leverage, and rapid profit-taking as key contributors to the decline. The weakness has created pressure on small-cap and mid-smallcap-focused mutual funds, many of which now underperform their benchmark counterparts.
Regulators are monitoring the situation closely as volatility rises across high-risk pockets of the market.
Tags:
- markets
- smallcaps
1 min read
74 words
Indian small-caps lost roughly ₹4 lakh crore in value this year, pressuring small-cap mutual funds and increasing regulatory scrutiny of risk-heavy segments.
The BSE Smallcap Index has fallen more than 4% in calendar year 2025, resulting in an estimated ₹4 lakh crore erosion in small-cap market capitalisation. Analysts point to stretched valuations, retail leverage, and rapid profit-taking as key contributors to the decline. The weakness has created pressure on small-cap and mid-smallcap-focused mutual funds, many of which now underperform their benchmark counterparts.
Regulators are monitoring the situation closely as volatility rises across high-risk pockets of the market.
The BSE Smallcap Index has fallen more than 4% in calendar year 2025, resulting in an estimated ₹4 lakh crore erosion in small-cap market capitalisation. Analysts point to stretched valuations, retail leverage, and rapid profit-taking as key contributors to the decline. The weakness has created pressure on small-cap and mid-smallcap-focused mutual funds, many of which now underperform their benchmark counterparts.
Regulators are monitoring the situation closely as volatility rises across high-risk pockets of the market.
Tags:
- markets
- smallcaps
- markets
- smallcaps
- mutual_funds
- volatility