New Delhi, Feb. 9 -- India's small-cap segment is under severe pressure, with nearly 80% of small-cap stocks on the BSE correcting 20-90% from their peaks, sharply denting investor wealth and sentiment. Retail investors, who typically have higher exposure to small-caps, are likely to be the worst affected by the ongoing sell-off.

Data from Capitaline shows that 946 of the odd 1,200 small-cap stocks have declined more than 20% from their highs-a threshold that marks entry into bear territory. The numbers highlight the depth and breadth of the downturn, underscoring how deeply entrenched the bear phase has become for small-cap investors.

As valuations reset and sentiment remains fragile, the spotlight is now on whether a potential India-U...