8 Penny Stocks with Exceptionally High Promoter Holding

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  
  • Home
  • Views On News
  • Sep 25, 2021 - 8 Penny Stocks with Exceptionally High Promoter Holding

8 Penny Stocks with Exceptionally High Promoter Holding

Sep 25, 2021

The excitement to make big bucks quickly often draws new investors to penny stocks.

If the promoter of a penny stock company is also holding a significant stake, that gives shareholders more confidence.

This is because promoters usually derive positive demand and attract funds.

And also, when a promoter reduces their holding, it's seen as negative by the shareholders, which isn't true.

What is important to understand here is why the promoters are reducing their stake and what the money will be used for.

But here's the catch with penny stocks.

Penny stocks are not for all. They are inherently riskier than bluechips or midcap stocks.

--- Advertisement ---
Act Now - Govt's Mega 2023 Plan Could Bring a Tsunami of Wealth

The Indian government is planning to cover 40,000 km of national highways with EV charging stations by 2023.

This could accelerate EV adoption in India and lead to a potential massive rally in a few EV stocks.

We've already identified 3 such EV stocks for you.

And we'll be revealing all details about them in an exclusive online event this coming Monday.

Click the link below to register immediately.

YES, Register Me for FREE.
------------------------------

Given that they present a huge growth potential, there is a high risk attached. There are times when penny stocks plunge 80-90% when things turn sour.

So is the worrying case in the current bull market where many penny stocks have delivered multibagger returns to the extent of over 2,000% in a short span of time.

In today's article, we look at penny stocks with marketcap less than Rs 25 bn, which have high promoter holding.

We have chosen the marketcap criteria of less than Rs 25 bn as this is the median of marketcap of the BSE small cap universe.

#1 Den Networks (74.90%)

As of June 2021, promoter holding in Den Networks stands at 74.90%.

Earlier in December 2020, promoters held 86.53% stake, but this got reduced as they offloaded stake via offer for sale (OFS).

Mukesh Ambani led Reliance Industries is its promoter. It bought majority stake in Den Networks in October 2018.

Den Networks is a leading Cable TV Distribution company with a wide range of services including Cable TV and Broadband.

Despite being in a bull market, the stock has been a laggard, eroding around 30% of shareholders' money.

Reasons behind the fall can be its June quarter results, wherein the bottomline dropped 29%.

Another factor can be that its promoter has backed out from the decision to merge Hathway, Den Networks, and TV18 Broadcast into Network18. The cancellation plan was announced in April 2021.

To know more, check out Den Networks latest shareholding pattern.

Find Out: How to Create Massive Gains from Govt's Mega 2023 Plan?

#2 Udaipur Cement Works (72.54%)

Promoter holding in Udaipur Cement has stayed constant at 72.54%.

As of June 2021, financial institutions and FIIs continue to hold a small piece of share in the company.

And they have benefitted well from as shares of the company have rallied more than 1.5x in the past one year alone.

Cement stocks have been outperformers in 2021.

Udaipur Cement Works was incorporated in 1993, and has its registered office at Jaipur, Rajasthan. The company presently is a subsidiary of JK Lakshmi Cement, which is part of the business conglomerate JK Organisation.

The company manufactures cement under the brand name Platinum Heavy Duty Cement.

To know more, check out Udaipur Cement's latest shareholding pattern.

#3 Andrew Yule & Company (89.25%)

Andrew Yule & Company is engaged in the business of engineering, electricals, and tea.

As of June 2021, promoter holding in the company stands at 89.25%. The government of India is its promoter.

Meanwhile, financial institutions/banks offloaded their entire 2.11% holding in the company in June quarter.

The company was in news recently as demand-supply mismatch sent coffee prices to multi-year highs.

Weather conditions in Brazil, the world's largest coffee producer, on top of strict lockdowns have disrupted the global coffee market and raised prices to four-year highs.

--- Advertisement ---
Act Now - Govt's Mega 2023 Plan Could Bring a Tsunami of Wealth

The Indian government is planning to cover 40,000 km of national highways with EV charging stations by 2023.

This could accelerate EV adoption in India and lead to a potential massive rally in a few EV stocks.

We've already identified 3 such EV stocks for you.

And we'll be revealing all details about them in an exclusive online event this coming Monday.

Click the link below to register immediately.

YES, Register Me for FREE.
------------------------------

Tea and coffee stocks witnessed buying interest following this news.

There were reports in February 2021 which suggested that the government would consider selling its stake in the company to achieve its divestment target.

Over the past one year, this public sector undertaking (PSU) has delivered almost 100% returns.

To know more, check out Andrew Yule's latest shareholding pattern and financial factsheet.

#4 Spice Mobility (74.09%)

Spice Mobility is engaged in the trading of mobile handsets and through its subsidiaries, in trading of IT products, mobile handsets, and their accessories.

As of June 2021, promoter holding in the company stands at 74.09%, down 0.10% from the March 2021 quarter.

The company has been gaining widespread attention after it entered into an agreement to form a JV with Tarya Fintech Holdings, a part of Israel's leading fintech group, for 'Lending Technology Platform' and other Technology Services.

It's shares are on a rising spree, delivering over 500% gains in one year alone.

In June this year, the company launched a new age startup, 'Korero Platforms'. This startup offers communication platform-as-a-service (CPaaS) solutions to enterprises. Hence, the name 'Korero', which means conversation.

To know more, check out Spice Mobility's latest shareholding pattern.

You can also check out Spice Mobility company fact sheet and quarterly results.

#5 HMT (93.69%)

Promoter holding in HMT stands at 93.69% as of June 2021. This has remained constant over the years.

The Indian government is HMT's promoter.

An interesting data point is that individual shareholders own less 1% stake in the company.

Even though the company has delivered 90% returns in the past year, retail investors have stayed away from this stock.

Well, they have their reasons as the company has posted losses for seven consecutive quarters.

The company was incorporated in 1953 by the government as a machine tool manufacturing company.

Over the years, it diversified into watches, tractors, printing machinery, metal forming presses, dye casting, and plastic processing machinery.

Today, HMT comprises five subsidiaries under the ambit of a holding company, which also manages the tractors business directly.

To know more, check out HMT's latest shareholding pattern.

#6 BMW Industries (73.90%)

BMW Industries is engaged in manufacturing, processing, and selling of steel products.

The company's products and services include structural steel, infrastructure, tower manufacture, rolling mill, steel service center, and cold rolling mill.

Over the past three quarters, promoters of the company have been increasing their stake. Currently, total promoter holding stands at 73.90%.

Meanwhile, retail investors hold a tiny 1.66% stake as of June 2021.

In the past year, shares of the company have rallied 170%.

To know more, check out BMW Industries' latest shareholding pattern.

#7 Music Broadcast (74.05%)

Promoter holding in Music Broadcast stands at 74.05% as of June 2021.

Mutual funds also have a significant 5.47% stake in the company. Mutual fund stake was 7.06% in the previous quarter.

Music Broadcast is a subsidiary of listed company Jagran Prakashan and is the first private FM radio broadcaster in India.

It operates under the brand name Radio City. The company currently has 39 FM radio stations across 12 states.

Well known investor Saurabh Mukherjea continues to hold a stake in the company. Though he did trim part of his stake in May.

Stock of Music Broadcast has delivered 32% gains in the past one year.

To know more, check out Music Broadcast's latest shareholding pattern.

#8 Sadhana Nitro Chem (74.01%)

Sadhana Nitro Chem is a holding company, engaged in the manufacturing of chemical intermediates, heavy organic chemicals, and performance chemicals.

Promoters of the company hold 74.02% stake in the company, and this has remained unchanged for the past two years.

Meanwhile, FIIs increased their stake to 0.21% from 0.05% in the June 2021 quarter.

The stock has been under pressure lately, falling from the highs of Rs 53 touched in July this year to Rs 33. Even after this fall, the stock is up 75% in the past year.

To know more, check out Sadhana Nitro's latest shareholding pattern.

Which other penny stocks have more than 70% promoter holding?

Apart from the above, here are other penny stocks which have high promoter holding as of June 2021.

Company Promoter Holding Marketcap (Rs bn)
Ravindra Trading 74.56 6.1
Sadbhav Infra 70.34 5.6
Madras Fertilizers 85.27 5.2
Vaarad Ventures 71.19 5.1
Globus Construction 73.68 4.5
Atlas Jewellery 95.82 4.4
Kalpana Industries 74.84 4.3
Pudumjee Paper 71.2 3.6
TRIL 74.91 3.6
Hindusthan National Glass 70.72 3.2
Scooters India 93.87 3.1
Gokul Refoils 72.09 2.8
Kothari Sugars 73.53 2.6
Shivam Autotech 74.8 2.2
Source: Equitymaster

Why high promoter holding is a big positive

The level of promoters' shareholding is very important, especially in India where many businesses are family owned.

The shareholding level acts as an indicator of the confidence of promoters in the business as well as the strength of leadership control on the company.

A company with a very high promoter shareholding often represents a scenario where the promoters see a bright future for the company and in turn, they plan to benefit from its good growth.

A promoter has all the information about the company. If they are investing, it shows that promoters are confident about the company's prospects.

While promoter holding is an important parameter, it should not be the sole reason for buying a stock.

In rare cases, penny stock promoters can use misleading information about the actual valuation of the company.

Also, promoters pledge their shares to raise funds for either personal or company needs.

High promoter pledging can lead to high volatility in the stock prices and as a result, it can turn out to be a major investment risk.

Share pledging is not an illegal activity. However, you must keep an eye out for such data points especially for companies with questionable managements.

It's always better to check promoter pledging before making investment decisions.

Over leveraged firms with high percentage of pledged shares could very well turn out to be value traps.

Happy investing!

Here are Links to Some Very Insightful Equitymaster Articles and Videos on Penny Stocks:

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...

Equitymaster requests your view! Post a comment on "8 Penny Stocks with Exceptionally High Promoter Holding". Click here!

  

More Views on News

What Fuelled the Sudden Surge in PVR and Inox Shares Today (Views On News)

Sep 27, 2021

Shares of both multiplex chain operators surged almost 18% to hit their 52-week highs.

Shareholder Activism Triggers a 30% Rally in Zee Entertainment Shares (Views On News)

Sep 14, 2021

Zee Entertainment shares zoom after top investors seek CEO and MD Punit Goenka's removal.

Here's Why Affle India Hit 5% Upper Circuit Today (Views On News)

Jul 2, 2021

In the past one year, the company's share price is up 202%. Can it go higher?

More Views on News

Most Popular

Your Ultimate Guide to Penny Stock Investing

A useful guide for navigating the highly profitable world of penny stocks in India

Is it Time to Switch from Tata Power to NTPC? (Profit Hunter)

Oct 11, 2021

Given the huge run up in Tata Power, does it make sense to switch to NTPC?

This Proxy EV Stock Just got a Power Crisis Boost (Profit Hunter)

Oct 8, 2021

After months of research, I've come across few stocks that excite me far more than the mainstream electric vehicle companies.

Rs 1 Lakh Invested in These Cryptos at the Start of 2021 Became Rs... (Views On News)

Oct 8, 2021

These cryptos would have multiplied investors' wealth by as much as 10,000% in just nine months.

5 Exciting 'Unlisted' Companies and How to Play Them (Views On News)

Oct 7, 2021

Here's how you can invest in some of the most exciting start-ups of the decade.

More

Become A Smarter Investor
In Just 5 Minutes

Multibagger Stock Guide 2022
Get our special report Multibagger Stocks Guide (2022 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

DEN NETWORKS SHARE PRICE


Oct 20, 2021 03:35 PM

TRACK DEN NETWORKS

  • Track your investment in DEN NETWORKS with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
  • Add To MyStocks

DEN NETWORKS - NETWORK18 MEDIA COMPARISON

COMPARE DEN NETWORKS WITH

MARKET STATS