The small-cap universe in 2025 has been a rollercoaster worth watching. In the first six months of the year (January–June), nearly 169 small-cap stocks crashed more than 25%, leaving investors on shaky ground. But just when pessimism was at its peak, a surprise turnaround came in the second half of the year. In less than three months, nine of those beaten-down counters staged a remarkable comeback, climbing over 40% each.
Is the smallcap rally a trap? Only 37% of stocks are outperforming their benchmark
India’s recent smallcap surge indicates that less stock is outpacing the benchmark index, revealing a narrowing group of successful stocks boosting overall returns. Conversely, largecap