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Smallcap stocks slide up to 20% in early 2026
India’s smallcap stocks have declined up to 20% in 2026, driven by policy pressures, rotation into large caps, and market volatility.
India’s smallcap segment has shown notable weakness in 2026, with the top ten smallcap stocks tumbling as much as 20% from recent highs amid broader market rotation and sectoral headwinds. Among the names hit hardest is Godfrey Phillips India, dragged down by regulatory and policy pressures tied to higher cigarette taxes.Thin liquidity, profit booking, and a tilt toward large caps have driven the downturn, prompting investors to reassess portfolio risk.