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Much of the gains in smallcap IT stocks have been due to the broad-based rally in the smallcap segment in 2023. The S&P BSE Smallcap index, a barometer of the performance of smallcap stocks, has rallied 45% year-to-date. While the broad-based gains in the smallcap space has contributed to the rally in IT stocks of this segment, some of the stocks have been backed by strong institutional buying and robust earnings performance.

The 50-share Nifty index has gained over 17 per cent on a year-to-date (YTD) basis till December 21, 2023. On the other hand, the Nifty Midcap 100 and Nifty Smallcap 250 indices have rallied 42 per cent and 44 per cent, respectively, YTD.

Automobiles, infrastructure, capital goods, industrials, and realty were the best performing sectors in 2023, driven by the strong domestic demand, capex push by the government, and growing discretionary consumption.

Amidst a recent market rally and mixed IPO performances, a pivotal question arises: Can IPO investments outperform in a market where benchmark returns have been subdued for the past two-thirds of the last three years?

But its the broader market that stole the show, with as many as 190 smallcap stocks turning multibaggers this year, and 143 of them also hitting their lifetime highs, data by Ace Equity showed.