Smallcaps are micro monopolies that operate in specific niche markets where they dominate. Unlike large caps, smallcaps have domestic investors and are less affected by macro headwinds. Smallcaps tend to generate 2-3% more than large caps over a ten-year period and offer unique stories in the Indian markets. However, investing in smallcaps is extremely risky, and the likelihood of something going wrong quickly is higher due to smaller decision-making teams and limited oversight.