New Delhi: Indian equity space has been under severe selling pressure in the first half of 2022 due to rising inflation, FPI exodus, monetary policy tightening, geopolitical worries and falling rupee.
Despite this market mayhem, more than two dozen penny stocks have defied gravity to deliver multibagger returns to the investors in the first half of the ongoing calendar.
According to data from Ace Equity, as many as 26 stocks have delivered up to 2,770 per cent return in the year 2022 so far, with three zooming more than 1,400 per cent.
On the top of the list is the Mumbai-based trading and distribution firm which has zoomed 2,667.03 per cent during the first half of 2022.
The scrip rose to Rs 77.2 on June 30, 2022, from its close at Rs 2.79 on December 31, 2021.
It is followed by Ahmedabad-based realty player Gallops Enterprises and Chennai-based coal trader
, which have rallied 1,632 per cent and 1,471 per cent during the given period.
(835 per cent up), Beekay Niryat (575 per cent up), BLS Infotech (550 per cent up), (510 per cent up) and (500 per cent up) are other players to gain more than 500 per cent.
Agencies
Cressanda Solutions, Khoobsurat, , , and have also rallied sharply to deliver a return between 200-400 per cent each.
Penny stocks have no defined theoretical definition. However, stocks in single digits or below Rs 10 are bracketed in this club. In this study, companies with a market cap of less than Rs 1,000 crore at the end of 2021 have been considered.
Triveni Glass,
, Regency Trust, BCL Enterprises, , Modern Steels, , Sonal Adhesives, Gilada Finance, , Tine Agro and have also surged over 100 per cent.
Agencies
Market experts often warned investors that expecting such astronomical returns from all penny stocks would be a mistake. Such stories only attract attention but actually lack fundamental strength.
Vijay Singhania, Chairman, TradeSmart, said that bear markets tend to be illiquid, which offers fertile ground for micro-cap stocks. Companies with questionable fundamentals are easy to rig.
As investors are looking for ideas to invest, they fall prey to such stocks, he warned. “It is important to do thorough due diligence before investing, especially when it comes to unknown names.”
Some typical characteristics of these stocks tend to be low promoter holding, huge debt, accumulated losses, poor dividend track record and circuit-to-circuit movement.
Atanuu Agarrwal, Co-founder, Upside AI, cautioned that one should be wary of illiquid stocks that are being manipulated by unknown operators.
“Some small or micro-caps may seem like deep value bets on the surface, but they could have a broken business or a bad balance sheet, or both,” he cautioned. “Information asymmetry is always an issue at the low-end of the market.”
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
Denial of responsibility!NewsBit.us is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – [email protected]. The content will be deleted within 24 hours.
Agencies