Market Recap 2025: SMIDs stay weak; small caps underperform after three years, FirstCry and Ola Electric among top losers

The broader market had a subdued run in 2025, with small-cap stocks underperforming for the first time since 2022. While midcap stocks remained in positive territory this year, their gains were significantly lower compared with the past two years.

So far in 2025, the Nifty Midcap 100 has risen about 4%, while the Nifty Smallcap 100 has fallen nearly 9%. In contrast, the benchmark NIFTY50 index has gained more than 9%.

Mid- and small-cap stocks (SMIDs) underperformed as heightened global uncertainty prompted investors to allocate money into large-cap stocks, which are perceived to be relatively safer and more liquid during volatile market phases.

The earnings growth disappointments across several mid- and small-cap companies further dampened investor sentiment.

“Large-cap stocks, which are typically the go-to stocks for foreign investment, are now looking quite attractive and are likely to benefit as overseas investors return. While mid- and small-cap stocks still seem pricey, these valuations come on the back of stronger growth potential. However, there is a risk of disappointment if the anticipated 25% growth for small- and mid-cap stocks next year falls short, potentially leading to a further de-rating,” analysts at HSBC had said in a report.

The Nifty Midcap 100 had delivered strong returns over the past five years, rising 21.6% in calendar year 2020, followed by a sharp 44.3% gain in 2021. The index saw a relatively modest increase of 2.3% in 2022 but again rebounded strongly with a 45.3% surge in 2023. In 2024, the rally continued, with the gauge climbing 23.1%.

Source: NSE

Further, the Nifty Smallcap 100 has seen significant volatility over recent years, gaining 20.6% in calendar year 2020 and surging 57.5% in 2021. The index faced a sharp correction in 2022, declining 14.8%, before staging a strong recovery of 54.5% in 2023. The positive momentum continued in 2024, with the small-cap index rising 23.3%.

Small-cap stocks: What you need to know

Divam Sharma, chief executive officer and co-founder of Green Portfolio, said in a recent interview with Upstox News that value creation in the small-cap segment is likely to take time. He noted that capital flows into small-cap stocks are expected to be gradual, indicating that patient investors could be rewarded, even as they should remain prepared for near-term volatility.

Meanwhile, Gaurav Didwania, Partner & Fund Manager at Qode Advisors, in a recent interview, said the mid- and small-cap universe today is a very different beast from what it was in 2023–24. Several stocks had run far ahead of fundamentals; the correction we saw in 2025 was less a surprise and more a cleansing.

"Going into 2026, I remain constructive on the space but with much stronger caveats than before. This is no longer a phase where the index rises because liquidity lifts all boats. It is a dispersive market, where the difference between the top and bottom quartiles of stocks could be dramatic," the expert added.

Nifty Midcap 100 gainers and losers

Within the Nifty Midcap 100, L&T Finance led the gainers’ list, surging 112.3%. Aditya Birla Capital followed with an 80.5% rise, while Muthoot Finance and AU Small Finance Bank gained 77.2% and 77.1%, respectively. Ashok Leyland also featured among the top performers, advancing 54.3%.

On the other hand, Oracle Financial Services Software was the biggest loser, declining 38.4%, while Kalyan Jewellers fell 37.6%. IREDA dropped 36.6%, Supreme Industries slipped 34.5%, and NTPC Green Energy lost 33.5%.

Nifty Smallcap 100 gainers and losers

On the Nifty Smallcap 100, Laurus Labs led the gainers with a 78.4% rally, followed by Navin Fluorine International, which climbed 67.4%. Manappuram Finance advanced 60.4%, while MCX and CreditAccess Grameen rose 51.5% and 47%, respectively.

On the flip side, Ola Electric Mobility emerged as the top laggard, tumbling 67.9%, while Tejas Networks declined 64.5%. FirstCry parent Brainbees Solutions slid 52.8%, Whirlpool of India fell 52.4%, and Jupiter Wagons dropped 52.2%.