Number of penny stocks on BSE down 40% in one year

Updated: Mar 24 2005, 06:19am hrs
Penny stocks, which typically trade below Rs 10 irrespective of their par value, are fast losing their loathsome status. The number of penny stocks has drastically dropped by nearly 40% to 618 on March 22, 2005, compared with 1,105 on March 22, 2004.

The share of such stocks in the total number of stocks quoted on BSE has thus declined from 47.8% to 26.7% during the same period. During the one-year period, the number of stocks in the price range of Rs 10 to Rs 25 increased from 427 to 483. Their share in the total number of stocks quoted on the bourse also increased from 18.5% to 20.9%.

The number of stocks quoted between Rs 25 and Rs 50 increased from 251 to 349. The share of this group of stocks in the total number of stocks has increased from 10.8% to 15.1%.

Similarly, in the range of Rs 50 to Rs 75, the number of stocks increased from 131 to 190 during the study period. The share of these stocks too increased to 8.2% from 5.6% in the year ago period.

On March 22, 2005, there were 114 stocks being traded in the Rs 75-100 range, while the number of such stocks was 72 on March 22, 2004. The share of this group of stocks increased from 3.1% to 4.9%. Some stocks from this group too have moved to the above-Rs 100 category.

In the above-Rs 100 group, the number stocks increased from 328 to 560 during the period under review. Their share in total BSE stocks increased from 14.2% to 24.2%.

Anantapadmanabhan Sarma, executive vice-president and head - investment banking, IDBI Capital, said: On the back of sound economic fundamentals, several sectors of the economy have performed well and are experiencing much higher cash flows. In this backdrop and in view of specific interests in mid-cap and small-cap stocks in the growing sectors, shares of several companies (which were languishing during recession) have risen above par levels. Along with the herd, shares of some companies with low floating stocks have also risen above their fundamental values.

From the above analysis one thing is clear that the number of stocks has increased in all the price range during last one year except in the range of less than Rs 10. Highest increase and decrease in the number of stocks was seen the range of above Rs 100 and less than Rs 10 group, respectively.