SmallCap MidCap Stocks Gave Big Return To Investors In FY24 | Increased confidence in small companies, small caps in financial year 2023-24

Stock Market Update: The Indian stock market will always be remembered for the returns of smallcap-midcap stocks in the financial year 2023-24. Shares of smallcap and midcap companies listed in BSE's mid-cap and small-cap index have given returns of about 62 percent. Mid-cap and smallcap stocks have performed better than the Sensex. This record rise in smallcap and midcap stocks has happened due to the strong economic conditions of the country along with excellent quarterly results of these companies. Investors' confidence in these stocks has increased.

In the financial year 2023-24, the BSE mid-cap index saw a jump of 15,013.95 points or 62.38 percent, while the small-cap index saw a jump of 16,068.99 points or 59.60 percent. In comparison, BSE Sensex has shown a rise of 14,659.83 points or 24.85 percent during the financial year.

Suman Banerjee, CIO at hedge fund Hedonova, said this change in investor sentiment was driven by strong macroeconomic conditions in India, which traditionally promotes a quick rise in shares of smaller companies during periods of economic expansion.

The entire market has shown strong performance in the financial year 2023-24. After slipping to its 52-week low of 23,881.79 points on March 31, 2023, the BSE Midcap index hit its lowest level of 40,282.49 on February 8. The BSE small-cap index hit its all-time high of 46,821.39 on February 7, while it had hit a 52-week low of 26,692.09 on March 31 last year. BSE Sensex had reached its historical high of 74,245.17 points on March 7 this year.

Sunil Nyati, Managing Director, Swastika Investmart Ltd, said, the outperformance of small company stocks compared to the Sensex in the current financial year reflects the dynamic nature of the Indian domestic market and the diverse opportunities it offers to investors. According to market analysts, shares of smaller companies are usually bought by local investors, while foreign investors focus on shares of larger companies.

In the financial year 2022-23, BSE Sensex had risen by 423.01 points or 0.72 percent. However, the BSE small-cap index fell 1,258.64 points or 4.46 per cent, while the mid-cap index declined marginally by 42.38 points or 0.17 per cent.

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