These 24 penny stocks delivered over 1,000% return in FY22; check them out here

At the time when the domestic equity market witnessed heavy volatility in the ongoing financial year 2021-22, at least 24 penny stocks have managed to multiply investors’ wealth by over ten times. This means Rs 1 lakh invested in any of these stocks on March 31 last year has now turned into over Rs 10 lakh at present. In general, any stock which is available under single-digit can be termed as a penny.

Before going ahead, here is a disclaimer that stocks mentioned in the article are for information purposes only. Investors should consult their financial advisors before taking any positions.

With a rally of 8,634 per cent, Sejal Glass emerged as the top gainer in the list. Shares of the company jumped to Rs 317.90 on March 22, 2022 against Rs 3.64 on March 31, 2021. On the other hand, the benchmark BSE Sensex gained 17 per cent during the same period, while broader indices the BSE Midcap and BSE Smallcap advanced 17.44 per cent and 34.88 per cent, respectively.

Data further highlighted that other stocks, including HCP Plastene Bulkpack, Salem Erode Investments, Vegetable Products, MIC Electronics, Cressanda Solutions, Flomic Global Logistics and Radhe Developers (India), also rallied over 2,000 per cent since the beginning of the ongoing financial years. Shares of these companies were available at below Rs 10 on March 31, 2021.

Going with market watchers, conservative investors should avoid penny stocks. Industry experts also believe that penny or low-priced shares often tempt people to go for them as they deliver quick returns. On the other hand, some are also desired by the operators as even with little support they can boost up the stock prices.

Kolkata-based individual investor and SEBI-registered analyst Soumya Malani said, “Gullible retail investors should avoid penny stocks. For investing in stocks, let alone big or small, same aspects of a good promoter, scalable business model, some competitive advantage which its peer is lacking would be the one to watch out for.”

Chennai Ferrous Industries, ISF, Brightcom Group, Adinath Textiles, Khoobsurat, NCL Research, JITF Infralogistics, Elegant Floriculture & Agrotech, Shah Alloys, Pan India Corporation, Gujarat Credit Corporation, Lloyds Steels Industries, Rajnish Wellness, Visagar Financial Services, Sawaca Business Machines and Kakatiya Textiles, which were also available in single-digit earlier, have also surged between 1,000 per cent-2,000 per cent in the ongoing financial year till date.

Malani further advised investors to never buy a company with a sun-setting business model. “Investors should also avoid companies with low promoter holding or with reducing shareholding pattern of promoters. One should also not go for stocks with frequent equity dilution. Market participants should also abstain from picking stocks which have got a past bad track record and questionable background,” he added.

In the list of top losers among the penny stocks, Trio Mercantile & Trading, Vikas WSP, Goyal Associates, WinPro Industries, Uttam Galva Steels, LCC Infotech, Abhishek Infraventures and Alfa Transformers plunged between 25 per cent and 55 per cent so far in FY22.