The worst decline in India's small- and mid-cap stocks since March 2020 is being exacerbated by panic selling and market turbulence.

The greatest drop to hit India's small- and mid-cap stocks since the March 2020 COVID market catastrophe has left ordinary investors bruised and portfolios deeply in the negative. The BSE Smallcap index fell 14%, its first double-digit monthly loss since the 1929 collapse, and the Nifty Midcap 100 fell 10.8%, making February a bloodbath as panic-selling engulfed the whole market.

In only one month, 321 of the 938 stocks in the BSE Smallcap index plummeted by more than 20%, with Vakrangee, Zen Technologies, Oriental Rail Infra, and Suratwwala Business Group all plummeting by 40% to 66%. Even worse, portfolios are in ruins as 243 smallcaps have already lost over half of their value from their 52-week highs.

The Nifty Smallcap 100 fell 3% to its lowest closing since March 19, 2024, while the Nifty Midcap 100 plummeted to its lowest level since March 27, 2024, last week. As persistent selling, poor global signals, political unpredictability, and liquidity issues in small and midcap equities stoke fears that the worst is still to come, investor morale is collapsing.