Best Small-Cap Stocks to Invest in 2025 Using Trading Apps
As the Indian stock market continues to expand, small-cap stocks are gaining popularity among investors due to their growth potential. Small-cap stocks are emerging as one of the most promising investment options in 2025. While they come with high risks, but they can also be exciting and have the potential to deliver maximum returns.
In this guide, we’ll explore more about small-cap stocks, some of the top performing small-cap stocks to invest in in 2025 using stocks apps, who should invest in the same, and key factors to consider.
What are Small-Cap Stocks?
Small-cap stocks are shares of small companies that carry high risks but have higher growth potential. They are mostly the preferred choice of investment among investors seeking high returns.
Features of small-cap stocks:
- Small-cap stocks are the shares of the companies with market valuation between ₹500 – ₹5,000 crores.
- Small-cap stocks are riskier than large-cap stocks.
- Investors can potentially earn more returns by investing in small-cap stocks through an online share trading app than investing in large-cap stocks.
- Investing in these stocks can help you diversify your portfolio and earn maximum returns.
Best Small-Cap Stocks to Invest in 2025
While stocks financing are becoming more common, investors can conveniently find these top small-cap stocks on online platforms in 2025:
1.Indian Energy Exchange Ltd (IEX)
- Sector: Power Trading and Consultancy
- 5-Year Returns: 180.78%
- Why Invest?: IEX has shown an impressive growth over the past few years. It is an energy trading platform that facilitates renewable energy and electricity and ensures a transparent marketplace in the power sector for buyers and sellers.
2. Central Depository Services (India) Ltd (CDSL)
- Sector: Stock Exchanges and Ratings
- 5-Year Returns: 826%
- Why Invest?: CDSL has shown a strong performance in 2024 and has been maintaining a dividend payout of approximately 55%. Being one of the two India’s central securities depositories, it primarily allows investors to buy, sell and store their financial securities.
3. UTI Asset Management Company Ltd
- Sector: Asset Management
- 5-Year Returns: 98.24%
- Why Invest?: One of India’s leasing asset management companies, has been performing well. UTI AMC has been one of the top choices of individual and institutional investors to manage their investments, portfolios and providing retirement solutions.
4. Five-Star Business Finance Ltd
- Sector: Consumer Finance
- 5-Year Returns: 36.84%
- Why Invest?: The NBFC has been known for offering secured business loans to small company entrepreneurs and self-employed individuals. With multiple services, they have been empowering micro and small businesses.
Who Should Invest in Small-Cap Stocks?
Considering the small-cap stocks contain high risks, they generally attract investors with high risk appetite and growth opportunities. Investing in small-cap shares via stocks apps allows users to diversify their portfolios and grow their investments to double or triple the value. Long-term investors who have been investing for the past 5-10 years, can also make an investment in small-cap stocks.
Key Considerations Before Investing in Small-Cap Stocks
Ensure to consider these points when investing in small-cap shares:
- Small-cap stocks are more volatile and riskier than large-cap stocks, so keep yourself prepared for frequent price fluctuations.
- Before investing, make sure to download a reliable online share trading app and use it to research the company, their business model and revenue growth.
- Keep yourself updated on market trends as small-cap funds are more sensitive to economic downturns.
- Ensure that you do not invest all your funds in one type of security and diversify your portfolio to reduce risk and earn higher returns.
Final Thoughts
Investing in small-cap stocks can be a great opportunity to maximise your investment, but don’t forget that it contains high risks and is more volatile than large-cap stocks. Make sure you use a trusted online share trading app like Bajaj Finserv, which has a wide range of investment options that allow you to diversify your portfolio. It’s a user-friendly platform that charges low brokerage fees and helps users open a free Demat account seamlessly.
So, whether you are a beginner or an experienced investor, consider analysing your risk tolerance, making sure your investments align with your financial goals, and checking market conditions before investing.
