These 25 stocks have rallied between 100-160 per cent since January 1, 2022, suggests data available with ACE Equity. Ten other names have rallied more than 90 per cent during the period under review. This is at a time when the recent selloff has shaved off gains for BSE Sensex and NSE Nifty, with both turning flat on a year-to-date (YTD) basis.
The correction, triggered by a fall in global equities, inflation worries, third wave of the pandemic, tightening of monetary policy by central banks, has had little impact on these names.
Real estate counter RTCL topped the list, with a 157 per cent return during the period under review. The scrip rallied to Rs 26.95 on Friday, January 21 from its closing price of Rs 10.48 on December 31 last year.
It is followed by Tranway Technologies, an IT consulting microcap, that has risen 145 per cent to Rs 16.26 from Rs 6.65 between January 1-21 period.
The flat glass manufacturing company, Triveni Glass, and jewellery maker Orosil Smiths India, formerly known as Silver
, have surged 131 per cent and 125 per cent, respectively.
Other names — Citizen Infoline, Swiss Military Consumer Goods, IL&FS Engineering and Construction, Tine Agro, Services, Kinetic Trust, Senthil Infotek and Terrascope Ventures — have surged between 105-110 per cent.
Penny stocks, popular among retail investors, are risky because market rumours are the primary source of price action in these stocks, said Likhita Chepa, Senior Research Analyst, CapitalVia Global Research. “Spotting the right opportunity in these stocks is difficult and they can also become extremely volatile during the corrective phase,” she added.
There is no theoretical definition for penny stocks. However, stocks with single-digit prices or below Rs 10 are bracketed in this club. ETmarkets.com has considered companies that had a market capitalisation of less than Rs 1,000 crore at the end of 2021 for the purpose of this study.
Some typical characteristics of these stocks tend to be low promoter holding, huge debt, accumulated losses and poor dividend track record.
“Manipulation by operators plays an important role in such stocks. Investors should stay away from penny stocks as wealth is created by investing in high-quality stocks and remaining invested for long term,” said Vijaykumar of Geojit advised.
Shares of FGP, ARC Finance, Thirai Projects, Kaiser Corp, Goenka Diamond and Jewels, Beeyu Overseas, Madhusudan Securities, Omansh Enterprises, Consolidated Construction, Luharuka Media & Infra, MFL India and Maharashtra Corp have also doubled investors wealth during the given period.
Other stocks like GV Films, Sun Retail, Neelkanth Rockminerals, Johnson Pharmacare, BLS infotech, Chambal Breweries, Biogen Pharmachem,
, Organic Coatings, Vikas EcoTech and Vikas Lifecare have delivered 90-100 per cent return to the investors.
ETMarkets.comInvesting in micro or smallcap funds rather than direct equities is a better option, Chepa said, adding that these can be beneficial to investors that follow a buy-sell-and-forget strategy
However, not all penny stocks have awarded investors. As many as nine stocks have tanked between 30-50 per cent during 2022 so far, with three of them – Samtex Fashions, Viji Finance and Cranes Software – down over 40 per cent.
Other names include CLC Industries (39 per cent down), Abhinav Leasing & Finance(34 per cent down), HB Leasing (34 per cent down), CNI Research (34 per cent down), Tirupati Tyres (39 per cent down) and Brijlaxmi Leasing (30 per cent down).
