65,000% in a year! How long before the penny stock bubble bursts?
Bharat Global Developers isn't the only company that has had its shares shooting up to dizzying levels. The world of little-known penny and micro-cap stocks has been abuzz with activity with shares of at least 200 companies skyrocketing between 300% and an astonishing 65,000% in the past year. The action underscores the heightened appetite among investors for red-hot stocks of companies with limited earnings amid the recent stock market frenzy.
It's not uncommon for stocks to generate exceptional returns in a bull market, like the one in the past four years, but what's unusual is that 99 companies posted net sales of less than ₹10 crore in FY24, a fraction of their total market value.
The top performer in this list is Sri Adhikari Brothers Television, shares of which surged from ₹3 in December last year to ₹2,198 on December 10. The market capitalisation of the company, which posted ₹3 crore turnover and ₹21 crore loss in FY24, stood at ₹4,600 crore. After a share capital reduction, the stock was relisted on April 2, 2024, at ₹41 per share.
Similarly, Marsons, a power transformer maker with ₹6.43 crore turnover and ₹63 lakh profit, rallied 4,478% and now has a market capitalisation of ₹3,765 crore. Aayush Food & Herbs, with a turnover of ₹60 lakh, surged 4,155% in the past year, pushing its market cap to ₹671 crore.
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