The BSE Small Cap index has advanced 14.83 per cent to 7,523.18 as of April 11, while the BSE Mid Cap index has gained 9.43 per cent to 7,338.46.
The benchmark 30-share BSE Sensex has risen 6.88 per cent to 22,628.96, after touching a record close of 22,715.33 on April 10.
In 2013, even as the stock markets recorded handsome gains, driven by large blue-chips, small and mid-cap stocks declined as much as 12 per cent.
Analysts said retail investors are major participants in mid-cap and small-cap stocks and activity in this segment has increased over the past few months.
Marketmen say smaller stocks are generally bought by local investors, with overseas investors focusing on blue-chip shares.
When the markets rally, smaller stocks move ahead of front-line shares, an expert said.
Sentiment in the stock market has picked up on hopes that a BJP-led government will come to power after the ongoing general elections. According to analysts, the Bharatiya Janata Party is perceived as being more market-friendly.
Besides, investors expect the country's economy to improve on the back of easing inflation, they said.
The mid-cap index tracks companies with a market value that is on average one-fifth of blue-chips or large firms. Small-cap firms are almost a tenth of that.