Smallcap and midcap stocks in the Indian stock market gave strong returns to investors in 2024. Their success can be attributed to strong domestic consumption, government investment, and incentive schemes. The BSE smallcap index jumped 28.45% and the midcap index 25.61% this year, while the Sensex gained 8.72%.

impact of government schemes

Experts believe that government investment in sectors such as real estate, infrastructure, healthcare, and renewable energy gave impetus to smallcap and midcap stocks. The production-linked incentive (PLI) scheme and technology advancement boosted the earnings of these companies.

Increased interest of investors

Palka Arora Chopra, Director, Master Capital Services, said that domestic consumption and policy support strengthened the shares of small companies. Also, heavy investment was seen in midcap and smallcap funds through systematic investment plans (SIP).

Record performance of the year

In the year 2024, the BSE Smallcap touched a high of 57,827.69 points on December 12. The Midcap index hit a record high of 49,701.15 on September 24, while the Sensex reached 85,978.25 on September 27.

Hope remains despite the decline

The market has seen some correction in recent months, but experts see it as a correction in valuations. According to Sunil Nyati of Swastika Investmart, domestic liquidity played a key role in the performance of midcaps and smallcaps.

Optimistic outlook for 2025

Analysts say that strong domestic demand, government spending on infrastructure and policy stability will keep the future of smallcap and midcap stocks bright. These segments will remain attractive for investors even in 2025.

It is worth noting that in 2024, smallcap and midcap stocks outshone the big stocks with their brilliance. Investors enjoyed better returns in these stocks. Their performance is expected to remain positive in the coming times as well, due to which this segment will remain a reliable option for investors.