Last Updated On: 10 Apr 2026
|Created On: 10 Apr 2026
5 min read
Indian equity markets comprise a wide range of stocks that provide diversified exposure to various sectors and sizes (market capitalizations). These are broadly split into three categories – large cap, mid cap and small cap. Beyond large caps and mid caps exists a vast universe of small cap companies that represent emerging businesses, niche players and potential future leaders. Many small cap stocks are in the early stages of growth and have the potential for high growth, especially over the long term.
The Nifty Smallcap 250 Index represents the small cap universe of listed stocks in India, comprising approximately the 251st to 500th companies based on market capitalization from the NIFTY 500 Index. Investing in the Nifty Smallcap 250 Index provides investors with the SHORT OF TIME? Catch the summarized version of the story on opportunity to benefit from the growth potential of these small-sized companies.
For detailed methodology, please visit www.niftyindices.com
The Nifty Smallcap 250 Index provides diversified exposure to several sectors including Financial Services, Capital Goods and Healthcare
Source: NSE Indices, internal calculations. Data as of Feb 27, 2026.
The Nifty Smallcap 250 Index provides exposure across 21 sectors as against the 15-sector exposure provided by the Nifty 50 Index as on Feb 27, 2026. The former is overweight sectors such as Capital Goods, Healthcare, Consumer Durables, etc. that may benefit from increased business and consumer demand post GST Rationalization.
The Nifty Smallcap 250 TRI has outperformed the Nifty 50 TRI over long time horizons
Source: NSE Indices Ltd. and internal calculations. As on Feb 27, 2026. ^ Apr 01, 2005 is the inception date for the Nifty Smallcap 250 TRI. Past performance may or may not be sustained in the future and is not a guarantee of any future returns. HDFC AMC/Mutual Fund is not guaranteeing or promising or forecasting any returns. *CAGR: Compounded Annual Growth Rate
The P/E ratio of the BSE Smallcap 250 Index has moderated as compared to previous levels, moving closer to its long-term average. The BSE Smallcap 250 Index P/E was 24.15 as of Feb 2026, compared to the 10-year average P/E of 17.96.
Source: Bloomberg, Kotak Institutional Equities. Data from Feb, 2016 to Feb, 2026.
The small cap segment (as represented by the Nifty Smallcap 250 Index for the below analysis) delivered a robust 25% YoY profit growth in Q3 FY26, marking a considerable recovery relative to Q2 FY25 to Q1 FY26. The surge in small cap earnings for Q3 FY26 was fuelled by strong performances from Financial Services, PSU Banks, Autos, Metals and Oil & Gas.
Source: Kotak Institutional Equities
Views expressed herein as on Mar 11, 2026 involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied herein. Stocks/Sectors referred are illustrative and should not be construed as an investment advice or a research report or a recommendation by HDFC Mutual Fund (“the Fund”) / HDFC AMC to buy or sell the stock or any other security covered under the respective sector/s. The Fund may or may not have any present or future positions in these sectors. HDFC Mutual Fund/ HDFC AMC is not indicating or guaranteeing returns on any investments. Readers should seek professional advice before taking any investment related decisions.
Source: MFI360 Explorer, Morningstar, Bloomberg, internal calculations. Past performance may or may not be sustained in future and is not a guarantee of any future returns.
Disclaimer: The data/statistics is given for general information purposes only and is not an investment advice. Neither HDFC AMC / HDFC Mutual Fund nor any person connected with them, accept any liability arising from the use of this document. The recipient(s) before acting on any information herein should make his/her/their own investigation and seek appropriate professional advice. *Gold and Silver prices in INR do not include any customs duties, local taxes etc. Returns less than 1 year period are simple and greater than 1 year period are compounded annualized (CAGR). § Year to date. ∑ Financial year to date. Date of Release: 2nd April, 2026.
Riskometer as on February 28, 2026. #For latest riskometer, investors may refer to the Monthly Portfolios disclosed on the website of the Fund viz. www.hdfcfund.com
Riskometer as on February 28, 2026. #For latest riskometer, investors may refer to the Monthly Portfolios disclosed on the website of the Fund viz. www.hdfcfund.com π Investors in the Scheme shall bear the recurring expenses of the Scheme in addition to the expenses of other schemes in which this Fund of Fund scheme makes investment (subject to regulatory limits).
NSE Disclaimer: The above mentioned Schemes offered by HDFC Asset Management Company Limited (HDFC AMC) having benchmark as NSE Indices are not sponsored, endorsed, sold or promoted by NSE INDICES LIMITED (formerly known as India Index Services & Products Limited (IISL)). NSE INDICES LIMITED does not make any representation or warranty, express or implied (including warranties of merchantability or fitness for particular purpose or use) and disclaims all liability to the owners of the Products or any member of the public regarding the advisability of investing in securities generally or in the Products linked to the respective underlying indices of NSE to track general stock market performance in India. Please read the full Disclaimers in the Offer Document of the Products.
BSE Disclaimer: The above mentioned schemes of HDFC AMC having benchmark as BSE Indices are based on the underlying indices of BSE. BSE® and SENSEX® are registered trademarks of BSE Limited. The Schemes is not sponsored, endorsed marketed or promoted by BSE or their respective affiliates. Please refer to the Scheme Information Document for disclaimers.
MSCI Disclaimer: HDFC Developed World Overseas Equity Passive FOF is not sponsored, endorsed, sold or promoted by MSCI. All MSCI indexes are owned by MSCI and provided as-is without any warranties. MSCI assumes no liability for or in connection with the MSCI indexes. Please refer the Scheme Information Document for complete disclaimer.
CRISIL Disclaimer and Copyright Notice : “© CRISIL Limited. All Rights Reserved Each CRISIL Index (including, for the avoidance of doubt, its values and constituents) is the sole property of CRISIL Limited (CRISIL). No CRISIL Index may be copied, retransmitted or redistributed in any manner. While CRISIL uses reasonable care in computing the CRISIL Indices and bases its calculation on data that it considers reliable, CRISIL does not warrant that any CRISIL Index is error-free, complete, adequate or without faults. Anyone accessing and/or using any part of the CRISIL Indices does so subject to the condition that: (a) CRISIL is not responsible for any errors, omissions or faults with respect to any CRISIL Index or for the results obtained from the use of any CRISIL Index; (b) CRISIL does not accept any liability (and expressly excludes all liability) arising from or relating to their use of any part of CRISIL Indices.
The views are based on internal data, publicly available information and other sources believed to be reliable. The statements contained herein are based on our current views and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Stocks/Sectors referred are illustrative and not recommended by HDFC Mutual Fund (“the Fund”)/ HDFC AMC. The Schemes of the Fund may or may not have any present or future positions in these sectors. It should not be construed as an investment advice or a research report or a recommendation by the Fund/HDFC AMC to buy or sell the stock or any other security covered under the respective sector/s. The Fund/ HDFCAMC is not guaranteeing any returns on investments made in the Scheme(s). Past performance may or may not be sustained in future and is not a guarantee of any future returns. HDFC Asset Management Company Limited (“HDFC AMC”) does not warrant the completeness or accuracy of the information herein. Neither HDFC AMC, nor any person connected with it, accepts any liability arising from the use of this material. The recipient(s) should before taking any decision, should make their own investigation and seek appropriate professional advice.
MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY.
Your opinion matters - share your thoughts and help us improve.
