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IPO Boom, Large-Cap Underperformance Reshape India's Equity Market Dominance
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CNBC TV18•25-09-2026, 20:12
IPO Boom, Large-Cap Underperformance Reshape India's Equity Market Dominance
- •The dominance of India's top 500 companies in overall market capitalization has fallen to a record low due to new listings and large-cap underperformance.
- •The BSE 500 Index, once representing 96% of BSE's market value, now accounts for just 85%, indicating a broadening equity market.
- •The BSE 500 has underperformed, declining 5.6% this year, while the BSE SmallCap Index gained 13.3%.
- •A steady stream of IPOs, including NSE's significant listing, has expanded the market with companies outside the BSE 500.
- •Investor expectations of stronger growth in mid- and small-cap companies, with higher earnings growth, are driving the shift in market leadership.
Key Questions Answered
The steady expansion of India’s listed universe through new IPO listings and the underperformance of large-cap stocks have combined to reduce the BSE 500 Index's share of total market value to a record low of 85% instead of its historical 96%.
While the BSE 500 Index has declined 5.6% and fallen about 9% from its September 2024 peak, the BSE SmallCap Index has posted a 13.3% gain, driven by stronger investor growth expectations and higher earnings growth in mid- and small-cap segments.
Around 230 companies, encompassing both mainboard and SME listings, have debuted in 2026 so far, collectively commanding a market capitalisation of about ₹12.5 lakh crore.
