Penny stocks, once a happy hunting ground for punters, have been doing badly in the current bull market: Kishor Kadam.
MUMBAI: Penny stocks, once a happy hunting ground for punters, have been doing badly in the current bull market. A survey by DNA Money of penny stocks - defined for our purposes as shares that quote below Rs 10 - shows very little bullishness. If the overall market has seen five gainers for every loser since June 14, when the market hit a bottom, among penny stocks there are only 1.45 gainers for every loser.
During the period from June 14 to September 22, the Bombay Stock Exchange Sensex recovered 37%. Out of the 30 Sensex stocks, barring Reliance Energy, every stock posted more than 20% returns. The broader BSE 500 index also recorded a 36% rise.
But the 550-and-odd penny stocks saw aggregate gains of just half as much at 18.2%. There were 325 gainers and 225 losers as against 1,900 gainers and 400 losers in the overall market.
The combined market capitalisation of shares priced below Rs 10 grew from Rs 8,309 crore on June 14 to Rs 9,822 crore on September 22.
But several low-priced shares posted handsome gains, with 14 of them doing over 100% vaults. Consolidated Securities (up 571%), Crazy Infotec (up 426%), Rainbow Foundations (up 223%), Ritesh Industries (up 215%) and Rasoya Proteins (up 169%) were some that caught the eye.
Another 49 stocks witnessed gains between 51% and 100%, while 87 stocks rose between 21% and 50%. Eighty shares saw increases of 11-20%.
Among sub-Rs 10 shares, the gainers’ list was dominated by the textiles sector with 45 companies, followed by 43 non-banking finance companies, 28 software firms, 15 pharma firms and 14 steel companies.
Among the 225 losing penny shares, the stock prices of as many as 60 declined in the range of 21-56%. In the case of another 72 losers, the prices slumped between 11-20%. The top losers in percentage terms were Saarc Net (down 56%), JD Orgochem (down 54%), Universal Prime Aluminium (down 50%) and Enrich Industries and Thana Electric (49% each).
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