This study examines the comparative performance of Blue-chip and Small-cap stocks in the Indian equity market, focusing on risk–return profiles, investor suitability, and strategic portfolio implications. The study evaluates fourteen listed companies, seven blue-chip and seven small-cap over the period 2020–2025. Secondary data analysis employed key financial indicators such as five-year CAGR, beta, standard deviation, Sharpe ratio, correlation with Nifty 50, and average traded value to measure stock behavior across categories. Findings indicate that blue-chip stocks demonstrate lower volatility, higher stability, and consistent long-term returns, positioning them as suitable for risk-averse and long-horizon investors. Conversely, small-cap stocks reveal higher volatility, liquidity constraints, and stronger market sensitivity, but offer potential for superior short to medium-term returns, aligning with aggressive investor profiles. The study recommends a hybrid investment strategy and emphasizes diversification, contributing to both investor practice and academic understanding of equity dynamics in emerging markets.
SALONI PATIDAR (Thu,) studied this question.