Securing Hannav Ledger...
Securing Hannav Ledger...
Glossary
Small-cap stocks are companies ranked below the top 250 by market capitalisation, representing emerging businesses with high growth potential.
Small caps are smaller companies that can grow fast or fail — highest risk and reward among listed stocks.
Small-cap funds require 65% minimum in small-cap stocks. Thin liquidity causes sharp price gaps. SEBI limits lump-sum inflows during overheating to protect investors from bubble risk.
A ₹1 lakh small-cap bet doubling in 3 years is possible but so is a 40% drawdown. Limit small-cap to a minority slice unless horizon exceeds 10 years.
Beginners often start with large cap or flexi cap, adding small cap gradually after understanding volatility tolerance.
Lower liquidity, weaker balance sheets, and risk-off sentiment cause disproportionate selling pressure.
AMCs may restrict fresh lump-sum inflows into small-cap schemes during frothy markets to manage liquidity and protect existing investors.