Even as securities exchanges battled with significant interruptions due to the covid-19-drove lock down, 25 penny stocks have become multi-baggers, flooding 100-1,240% over the most recent a half year. During a similar period, benchmark Sensex slipped 14%, while the BSE midcap and BSE smallcap records were down 11.42% and 7.8%, individually.

As per a Mint examination, 161 penny stocks have given positive returns, while 56 stocks slipped in the January-June period. Hathway Bhawani Cabletel and Datacom Ltd saw an astounding 1,240% ascent in its stock cost from ₹3 to ₹40.2 each. Also, Opto Circuits (India) Ltd flooded 392.71%, Andhra Cements Ltd took off 331.16% and JMT Auto Ltd hopped 310.61% over the most recent a half year. For the examination, stocks with advertise top of under ₹1,000 crore and stock estimation of ₹10 were thought of.

Penny stocks are illiquid stocks, which are exceptionally unstable and are viewed as hazardous wagers. “Ordinarily, not many far-located speculators purchase these penny stocks, making a happiness around them, pulling in new little league financial specialists with their low worth and guarantee of significant yields,” said an examiner at a retail business, mentioning namelessness.

As indicated by experts, deal chasing, or the base picking system by new market members prompted gains in these penny stocks.

In spite of the fact that the more extensive markets were a long way from arriving at their January levels, scarcely any penny stocks were at multi-year highs. Base fishing alludes to putting resources into resources that had declined because of inherent or extraneous factors, and were considered underestimated. Base fishing is a speculation technique wherein financial specialists purchase stocks whose costs had as of late dropped and were considered underestimated.

As per Amar Ambani, senior president and Institutional Research Head, Yes Securities, one purpose behind the penny stocks to rise is bountiful liquidity pursuing a wide range of stocks.

The dread of-passing up a major opportunity marvel among new financial specialists in securities exchanges frequently pursue such low-esteem stocks, he said. “In any case, the stocks are likewise first to fall when there is any troublesome news in the business sectors. The stocks have fallen so hard before and are so low in esteem that upticks in a couple of stocks optically looks strong.”

Ambani said penny stocks are generally administrator driven and fall prey to theoretical exchange, henceforth, they include high dangers.

Be that as it may, this isn’t an India-just wonder. Hertz, the second-biggest vehicle rental office in the US, had petitioned for financial protection in May, however its stock rose from $1.11 to $2.38, up 114% inside 24 hours, for the most part drove by merchants on Robinhood, a portable business. Undoubtedly, while some penny stocks turned multibaggers, a few additionally moved the other way.

Around 49 stocks turned penny stocks over the most recent a half year, losing as much as 90%. Darjeeling Ropeway Co. Ltd tumbled from ₹52.4 in January to ₹5.21 in June, losing 90%. Others, for example, Terrascope Ventures Ltd (down 80.88%) and Novateor Research Laboratories (down 79.59%) are the new penny stocks.

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