As December-quarter shareholding data for nearly 505 small-cap companies begins to roll out, early disclosures are already revealing an interesting market contradiction. A deeper analysis shows that retail investors have steadily reduced their stakes for three consecutive quarters in FY26 across 68 small-cap stocks. (Note: Retail investors are resident individuals holding nominal share capital up to Rs 2 lakhs)
What makes this trend intriguing is the price action. More than half of these stocks—35 out of 68—have delivered double-digit returns in FY26 so far, even as retail participation continued to decline. Is this retail profit-booking after a strong rally, or are investors prematurely stepping aside and missing the next leg of upside? The answer, as always, lies somewhere between caution and conviction—and only time will tell. In this analysis, we spotlight 12 small-cap stocks that surged between 40% and 130% during FY26, including three multibaggers, highlighting a growing disconnect between ownership trends and market performance. (Data Source: ACE Equity)