India’s smaller-company indexes fell Friday, renewing scrutiny of valuations and earnings support after an analyst cited liquidity as a force behind small-cap prices in comments to The Economic Times.
The Economic Times’ update at 3:24 a.m. ET (07:24 UTC) Friday put the Nifty Smallcap 250 at 16,237 points after a 4% intraday slide to its session low. The Nifty Midcap 100 stood at 55,421 points, down nearly 3%, the outlet reported. The Smallcap 250 had lost about 8% across four sessions, while the Midcap 100 was down 6% for the week to date. The same report placed the indexes about 12.5% and 14% below their respective 52-week highs of 18,551 and 64,451, reached in early September and late August.
VK Vijayakumar, chief investment strategist at Geojit Investments, said the small-cap market’s pricing had been driven more by available liquidity than by company fundamentals, The Economic Times reported. His view was that strong buying flows had lifted prices beyond what underlying business performance alone supported.
In its Oct. 22 report, The Economic Times quoted Atul Bhole, executive vice president and fund manager at Kotak Mahindra AMC, as saying recent declines had not yet made mid- and small-cap shares inexpensive, despite easing from their most stretched levels. Bhole cited projected earnings growth of 16% to 20% for the two groups, without giving a forecast period. He also said conflict news, crude prices and yields could shape the conditions for a stock-market recovery.
NSE Indices defines the Nifty Smallcap 250 as the 250 Nifty 500 companies ranked 251st through 500th. The Nifty Midcap 100 consists of 100 tradable stocks listed on the National Stock Exchange of India. The Economic Times reported that the Nifty Midcap 150 and Nifty Smallcap 250 had each entered correction territory three times in the previous two years. It said the Midcap 150 fell nearly 19% from its January 2025 high to its February low, while the Smallcap 250 fell nearly 26% before recovering.
For the 12 months ended Sept. 30, NSE Indices data show total returns of 7.23% for the Smallcap 250 and 4.57% for the Nifty Midcap 150, compared with a 7.09% loss for the Nifty 50.
