The latest liquidity stress-test disclosures for small-cap mutual funds reveal a notable rise in the time required to unwind portfolios. AMFI data show that the time needed to liquidate 50 per cent of small-cap portfolios has climbed to 20 days in October 2025, up from 15 days a year earlier. Likewise, the period required to sell 25 per cent of holdings has increased to 10 days, compared with 8 days in October 2024. This underscores weakening liquidity and diminishing market depth in the small-cap universe. The analysis is based on category averages for 31 small-cap schemes.

These disclosures have been published monthly ever since February 28, 2024, when SEBI raised a red flag over signs of froth in the mid- and small-cap segments and directed fund houses to run and report liquidity stres

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