From 2020–2024, Small-cap 250 enjoyed double-digit gains fueled by low rates, liquidity, and post-COVID earnings. But 2025 felt like a sequel that underdelivered: Small-cap 250 fell ~7%, while Nifty gained ~10% and Sensex ~9%. Stretched valuations near 36x, weak FII flows, and global tightening flipped leadership and cooled the favourite story.