Indian smallcap stocks are demonstrating significant growth in 2025, with the BSE Smallcap index outperforming both the Sensex and Midcap indices. As of May 28, 2025, the BSE Smallcap index was up by 0.54% at 52,146, marking a nearly 27% increase from its 52-week low on May 7, 2025.
Top Performing Stocks
Several stocks within the BSE Smallcap index have reached all-time highs, including Eris Lifesciences, Apollo Micro Systems, Force Motors, Paradeep Phosphates, India Glycols, EID Parry, and Hitachi Energy India. Certain stocks, particularly in the defense and aerospace sectors, have doubled investor returns in the last three months.
Defense and Aerospace Sector
Companies like Garden Reach Shipbuilders & Engineers (GRSE), NIBE, Bharat Dynamics (BDL), Data Patterns (India), Paras Defence and Space Technologies, and Astra Microwave Products have shown remarkable performance. This surge is attributed to increased demand for defense products amid geopolitical tensions and the government's focus on indigenous defense projects.
Other Notable Performers
Fertilizer and chemical stocks, such as Paradeep Phosphates and Mangalore Chemicals & Fertilizers, have also seen substantial gains. Additionally, Centum Electronics, NACL Industries, Cupid, and Cosmo First have delivered strong returns to investors.
Market Influences
Foreign Institutional Investors (FIIs) are increasingly investing in Indian small-cap stocks, drawn by their high growth potential. Despite some volatility, the long-term outlook for small caps remains positive, supported by strong earnings growth and strategic investments.