These five penny stocks have started 2024 with a bang

We’re only a week into 2024 and we’ve already seen stocks across the board rally.
We’re only a week into 2024 and we’ve already seen stocks across the board rally.

Summary

  • The exuberance of 2023 has clearly carried over into the first week of the new year, as these stocks show.

The week gone by was dominated by news of penny stocks and small caps rallying hard in the new year. We’re only a week into 2024 and we’ve already seen stocks across the board rally. The exuberance of 2023 has clearly carried over into the first week of 2024.

Let’s look at the top penny stocks that have started 2024 with a bang. If momentum and investor participation remain strong, you could expect these stocks to do well for at least the next couple of weeks.

#1 Advik Capital

The company is a non-deposit-taking NBFC, engaged in the business of investing funds, advancing loans to industries and financing lease operations, among other things.

It’s actively looking at other business avenues in the personal and consumer finance space.

Only a week into the new year, shares of the company have shot up around 80%, from 2 to 3.78.

Advik Capital stock price

Source: Google Finance
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Source: Google Finance

The reason? Even the company doesn’t know.

When asked by exchanges about the price movement, it said there was no undisclosed price-sensitive information or impending announcement or corporate action.

The sudden rise could be attributed to the company announcing plans to launch an alternative investment fund last month.

The company is expected to file for the licence with the markets regulator. It plans to raise 2.5 billion for the AIF and, as its sponsor, will invest 10% of its corpus.

This is part of the company’s plan to diversify into new businesses.

Advik Capital has seen its financials rebound strongly in the past two years, and that’s expected to continue this year as well, going by its half-year performance for FY24.

Financial snapshot

Source: Ace Equity
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Source: Ace Equity

#2 Integra Essentia

The company is in the business of life essentials, food (agro products), clothing (textiles and garments), infrastructure and energy.

In just one week, its stock has shot up by 69%, from 4.38 to 11.78.

Integra Essentia stock price

Source: Google Finance
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Source: Google Finance

The main reason for this could be that the company has fixed the record date for its bonus shares announcement. The company recently set 11 January as the record date for the issue of bonus shares in a 1:1 ratio. With the record date nearing, retail investors are buying the stock in droves.

There are other reasons as well. In November 2023, the company’s board approved the allotment of securities to raise up to 1 billion.

The company also entered the high-growth winery and beverages business by acquiring an additional stake in Brewtus Beverages in the second quarter of FY24.

Speaking of the second quarter, the company posted a massive jump in profit, aided by higher income. It posted a net profit of 75.4 million, up from 21.5 million in the same period last year.

In the second quarter it received orders worth 120 million for premium rice and cashew nuts from several business houses.

The company has seen a massive improvement in its financials in the past two years and, going by the first two quarters of this year, it could surpass last year’s numbers by a huge margin.

Financial snapshot

Source: Ace Equity
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Source: Ace Equity

#3 Alok Industries

The company is in the textile business and has a presence in the cotton and polyester segments.

Its operations are managed and supervised by Reliance Industries through its three nominee directors.

In the first week of 2024, shares of the company have spiked over 65%.

Alok Industries stock price

Source: Google Finance
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Source: Google Finance

The primary reason for this could be a 33 billion fund infusion from Reliance. It was reported last week that Reliance Industries has invested this sum in the company through non-convertible preference shares.

In November 2023, Alok Industries entered into an agreement with SBI for a term loan of 17.5 billion to repay existing loans as a part of its financial restructuring.

Still a loss-making company, it’s hoping for a turnaround in the remaining two quarters of FY24.

Financial snapshot

Source: Ace Equity
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Source: Ace Equity

#4 Zeal Aqua

The company conducts aquaculture farming and develops satellite farming, especially prawn farming and trading of seed, feed, and medicines required for shrimp farming across Gujarat.

In the first week of 2024, its shares are up almost 50%.

Zeal Aqua stock price

Source: Google Finance
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Source: Google Finance

When asked about this, the company said it didn’t have any price-sensitive information to disclose.

The company has seen a steady improvement in its financials in the past five years. FY24 could be its ever year ever in terms of sales and profit, going by its results for the first two quarters.

Financial snapshot

Source: Ace Equity
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Source: Ace Equity

Zeal Aqua’s promoters have more than 25 years of experience in shrimp farming, which is an added bonus. The company has over the years successfully diversified into several parts of the shrimp industry.

#5 Reliance Power

The company develops, constructs and operates power projects in India and abroad. It has a large power-generation portfolio, both operational and under development.

In the first week of 2024, shares of Reliance Power have surged around 40%.

Reliance Power stock price

Source: Google Finance
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Source: Google Finance

Shares of the company, along with other power stocks, have been in demand thanks to optimism about tariff hikes in the power sector.

Last week, Reliance Power signed an agreement to sell its 1,200 MW Kalai II hydroelectric project in Arunachal Pradesh for 1.3 billion, thereby monetising the asset.

Reliance Power’s shares have been in demand for the past three months owing to an improvement in its financials and capital infusion by promoters.

The company has made significant strides toward renewable energy in line with the government's push.

A recent highlight was its memorandum of understanding with the government of Rajasthan to develop 6,000 MW of solar-power projects in the state over the next decade.

One positive for the power sector is that companies typically have a secure position due to high entry barriers. However, Reliance Power has some strong competitors, and doesn’t have a long history of regular sales and consistent profits. So, we'll have to wait and see if it can make the most of this electricity demand.

Financial snapshot

Source: Ace Equity
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Source: Ace Equity

Which other penny stocks have gained the most?

Here are some other penny stocks that have started 2024 with a bang.

Source: Ace Equity
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Source: Ace Equity

Conclusion

The rally in these penny stocks in 2024 has attracted attention from investors.

While short-term gains may be attractive, it is crucial to carefully assess the potential risks and long-term viability of these investments.

Investing always involves a certain degree of risk, and it's crucial to weigh pros and cons before taking the plunge.

Disclaimer:This article is for information purposes only. It is not a stock recommendation and should not be treated as such.

This article is syndicated from Equitymaster.com

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