Small-, mid-cap indices may continue to underperform

EXPENSIVE VALUATIONS

- ANANYA GROVER

WHILE THE BENCHMARK indices — Sensex and Nifty — are hovering close to their all-time high, the smalland mid-cap (Smid) indices, which comprise higher-growth companies than large-caps, have underperformed on a year-to-date basis so far — the first time since 2022.

This comes after a substantial outperformance seen in 2024 as well as 2023. In 2025, while the large-cap benchmarks, Nifty 50 and Sensex, rose around 9-10%, the BSE Midcap index has only risen 1.3%. The BSE Smallcap has fallen 6.1%.