Mid- and Small-Cap Stocks Continue to Outperform Large-Caps in India's Stock Market

Despite concerns over elevated valuations, mid- and small-cap stocks have continued to outperform large-caps in India's stock market. The Nifty Smallcap 250 and BSE 250 Small cap indices are trading higher than their five-year average, with some experts attributing the trend to stronger-than-expected earnings growth, steady inflows, and relatively lower foreign institutional investor exposure. However, others warn of potential froth in these segments.