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Business News/ Markets / Stock Markets/  Top performing penny stocks of 2021 so far
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Top performing penny stocks of 2021 so far

Several penny stocks have delivered multi-fold returns in a short span of time. Here are a few of them.

Since penny stocks offer high returns in a short span of time, investors with high risk profile opt for them. (Photo: iStock)Premium
Since penny stocks offer high returns in a short span of time, investors with high risk profile opt for them. (Photo: iStock)

The category of penny stocks is among the most popular which retail investors prefer for investment.

Why?

It’s because they trade at lower prices and investors believe they can buy a huge chunk of shares.

One other factor supporting them is low liquidity. They have less tradable shares at the bourses when compared with other category stocks.

And also, since penny stocks offer high returns in a short span of time, investors with high risk profile opt for them.

In the past couple of months, there were several penny stocks which went on to deliver multi-fold returns in a short span of time.

Here are six penny stocks which have turned into a 10 bagger, i.e., which have given over 1,000 returns since the start of 2021.

#1 Adinath Textiles (1,952%)

Adinath Textiles share price has delivered 1,952% returns since the start of this year.

This microcap company’s share stood at 1.71 on 1 January 2021. Today, it trades at 35.09.

The stock rose to its all-time high of 35.09 on the BSE yesterday.

For the year ended March 2021, Adinath Textiles has reported a 557.1% rise in bottomline to 3.2 m.

What’s interesting is the company has recorded zero sales in last five quarters.

Its profit in the latest June 2021 quarter stood at 2.3 m, a rise of 360% against 0.5 m in the same period last year.

But how is this company earning profits without any revenues? Well, it has been able to log profit on the back of other income which stood at 5.4 m.

Adinath Textiles is a textiles-focused company with 4,800 spindles installed. The company has invested in cutting-edge machinery from (SAVIO) Italy and NSC (France).

Lately, textile stocks are in favour. The sector did suffer greatly in 2020 but it has recovered.

As of June 2021, promoters of the company hold 43.6% stake in the company. Check out its latest shareholding pattern.

Stock performance Adinath Textiles.
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Stock performance Adinath Textiles.

#2 Flomic Global Logistics (1,821%)

The next company in this list is Flomic Global Logistics, which has delivered 1,821% returns since January 2021.

On 1 January 2021, the company’s shares were trading at 1.95 per share. Currently, they trade at 37.45 with a marketcap of 269.6 m.

This logistics services firm was earlier called Flomic Freight Services, which in November 2020 completed its amalgamation with Vinaditya Trading.

The combined entity is now called Flomic Global Logistics.

Flomic Global is engaged in activities auxiliary to financial intermediation. This class includes activities of financial advisers, mortgage advisers and brokers, bureaux de change (foreign exchange services) etc.

The company has a growth plan to expand into tier-2 and tier-3 cities in India to cater to exporters and importers who will be taking advantage of 'Make in India' initiative.

Moreover, the company is expanding its warehousing and third-party logistic activities to cater to the growing demand of customers.

The company has a total of 7.2 m shares out of which 72.5% are held by public and 27.5% by the promoters.

Flomic Global stock performance.
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Flomic Global stock performance.

#3 Waaree Renewable Technologies (1,233%)

Remember we wrote to you about how Solar’s hot and India is on the cusp of a solar revolution as the Indian government plans to achieve 450 GW (gigawatts) of installed renewable capacity by 2030.

Well, Waaree Renewable Technologies seems to make the most of this theme as its shares have risen 1,233% since the start of this year.

Erstwhile known as Sangam Renewables, the company offers sustainable partnership by providing renewable energy solutions to industrial, institutional & commercial sectors, and improve their profitability through long-term renewable power supply.

The company started with assisting diversified financial services to MSMEs but later in 2016, ventured into renewable energy sector.

Mumbai-based Waaree is the largest solar PV module manufacturer in India. The company also provides solar energy solutions employing over 2,500 people globally. It owns the largest solar panel module manufacturing facility in India with a capacity of 2,000 megawatt.

India's investments in renewable energy have accelerated in recent years. Building a thermal power plant used to take more than 5 years. On the other hand, India is now setting up solar and wind farms in 2 years or less.

On 1 January 2021, the company’s shares were trading at 13.68 and at present, they trade at 182.30, a whopping rally of 1,233%!

Majority of the company's shares are owned by the promoters with only 25% available with the public.

Waaree Renewable Tech
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Waaree Renewable Tech

#4 Available Finance (1,222%)

Available Finance is engaged in the business of non-banking finance.

Despite having zero sales in nearly most of its quarters, the company has been able to grow its net profit.

Trading at 6.67 back in January 2021, Available Finance shares now trade at 88.20 commanding a marketcap of 900 m.

 

Available Finance.
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Available Finance.

#5 NMS Resources Global

Incorporated in 1986, NMS Resources Global earlier used to focus on food processing and commodity supply sector.

Now, the company has increased its business activities by addition of more business sectors such as contracting services like civil construction, pre-engineered buildings, skill development, financial consultancy, and engineering services.

It also provides exclusive supplies and marketing team for telecom provider companies.

The stock has delivered 1,215% gains since the start of this year.

NMS Resources Global.
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NMS Resources Global.

#6 Steel Strips Infrastructure (1,134%)

Steel Strips Infrastructures is engaged in business of infrastructure, real estate, trading, and commission agency business.

The company has promoted, developed, and manages the SAB Mall in Noida. The shopping complex has been designed by world renowned Hafeez contractor.

From trading at 4.10 back in January 2021, the company’s shares have zoomed to 50.60.

Yesterday, shares of the company zoomed 5% to a new 52-week high of 55.90 but erased gains later to end 5% lower.

The company has reported negative return on equity (ROE) for three consecutive years.

Steel Strips Infra
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Steel Strips Infra

Which other penny stocks have delivered stellar returns?

The penny stocks above delivered over 1,000% returns since the start of this year.

There are several such penny stocks which have delivered gains ranging from 400-900% since January 2021. Here are some of them.

Penny stocks performers.
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Penny stocks performers.

Here are top penny stock gainers of 2021 whose marketcap stands above 20 bn.

Penny stocks with over Rs20 bln in market cap.
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Penny stocks with over Rs20 bln in market cap.

How should one go about investing in penny stocks?

Penny stocks are inherently riskier than blue-chip or mid cap stocks.

On the brighter side, they present a huge growth potential. It’s not unusual for a good penny stock to turn a multibagger in a matter of months. But on the flipside, there is a high risk attached.

Not all penny stocks tend to be outperformers. That is the reason penny stocks are not recommended to those having a low risk profile.

The corpus that one sets aside for penny stocks should not be more than 5%-7% of the total money allocated towards equities.

Also, you need a very strong framework to separate the men from the boys in the penny stock universe. A framework that not only enables you to zero in on the right penny stock at the right price but also helps you avoid those big losers.

Happy Penny Stock Investing!

(This article is syndicated from Equitymaster.com)

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Published: 30 Aug 2021, 10:21 AM IST
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