There is no end to the woes of penny stocks. Ever since the Securities and Exchange Board of India cracked down on penny stocks, 67 of them have been continuously on the lower circuit - the lower level of the price band set by the exchanges.
This means even at the lower level, there are no buyers at these counters. For these stocks, the circuit (both lower and upper end of the band) is set at 5 per cent.
During the last 12 trading days, these stocks have declined by 38 per cent, wiping out Rs 950 crore (Rs 9.5 billion) worth of investors' wealth.
Besides the 67 stocks that have been on the lower circuit for 12 days continuously, 48 others were on it for 10 days, 95 for nine days, 100 for eight, 143 for seven and another 134 firms for six trading days.
These stocks are traded under T, and Z group categories. All scrips in T group are settled on "trade to trade" (compulsory delivery) basis on account of surveillance measures. The Z group category stocks are those, which do not comply with any of the seven norms required under listing.
There are 44 stocks from T group, 14 from Z group and 6 from TS group that are on down circuits for 12 trading days. The prominent among T group stocks are Aeoninan Investments, Comfort Intech, KSL and Industries, Karuna Cables and Silver Smith India. The list also includes Velan Hotels, Proto Infosys, Kailash Ficom, Nagpur Power and Interlink Petroleum from Z group.
The aggregate market wealth of non-A group stocks has been eroded by 11 per cent from Rs 1,67,827 crore (Rs 1678.27 billion) on September 21 to Rs 1,49,220 crore (Rs 1492.20 billion) on Monday.
Seventy-two stocks saw value depreciation of over 38 per cent in last 12 trading days. For 227 stocks, the fall in the market value varies between 30 per cent and 38 per cent, 199 declined between 25-30 per cent and 266 down between 20-25 per cent.
Rathi Udyog is the largest loser with its price declining 46 per cent -- from Rs 138.65 to Rs 75.25 on BSE. The market price of Transcon Research and Infotech fell by 46 per cent from Rs 10.57 to Rs 5.75. Karuna Cables' market price declined 43 per cent -- from Rs 153 to Rs 87.30.
Among other big losers, Silver Smith India fell 43 per cent to Rs 26 (Rs 45.35), Rohit Pulp 42 per cent to Rs 25.35 (Rs 44.05) and Sika Interplant System 42 per cent to Rs 181.45 (Rs 105.85).
