If the promoter of a penny stock company is holding a significant stake, that gives shareholders more confidence.
Why you ask?
The high promoter holding in a penny stock acts as an indicator of the confidence of promoters in the business as well as the strength of leadership control on the company.
A penny stock 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.
Here's a list of penny stocks with high promoter holding:
Check out this article to see the entire list of penny stocks with high promoter holding.
While promoter holding is an important parameter, it should not be the sole reason for buying a stock.
Sometimes, penny stock promoters can use misleading information about the actual valuation of the company.
You can also checkout our playlist on Penny Stocks on Equitymaster's YouTube channel.
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While promoter holding is an important parameter, it should not be the sole reason for buying a stock.
As per Equitymaster's Stock Screener, here is a list of the top multibagger penny stocks in India right now...
These companies have been ranked as per the returns they have given shareholders in the last 3 years.
Remember, it's not easy to identify future multibagger stocks, but if you do it carefully and with due diligence, you can find high growth companies which can turn out to become future multibaggers.
Penny stocks are shares of listed companies priced below Rs 100. In the US market, these stocks trade for less than a dollar i.e. for pennies. Hence the name.
Penny stocks have the potential for above-average returns. However, they are extremely risky. Therefore, investing in them requires care and caution.
High promoter holding indicates higher level of trust and confidence of promoters in the future of the company. In fact, high promoter holding is one of the essential qualities for fundamentally strong companies.
So, to answer the question, yes, high promoter holding is a good thing, especially when you look at penny stocks.
Sorting out data through financial websites such as BSE and NSE might be cumbersome. Because there are more than 6,000 listed companies on Indian bourses.
To avoid that, you can refer Equitymaster's Indian stock screener where you'll find a filtered list of companies with high promoter holding.