India, March 7 -- SME stocks represent companies with smaller market capitalisations and often less liquidity compared to large-cap firms. While they offer high growth potential, they are also highly volatile and sensitive to market swings, economic changes, and investor sentiment.

Many SME stocks can experience sharp price fluctuations, sometimes losing significant value quickly, as seen in recent market downturns. Investors in SME stocks need to be aware that while the upside can be attractive, the risks are equally high, and careful research and risk management are essential before investing.

These SME stocks faced a sharp downturn, with losing as much as 78% of their market value. The steep declines reflect growing investor cautio...