Talk about penny stocks!

There is this company listed – Kailash Auto Finance. Almost every single day, irrespective of the swings of the market, this penny stock figures out in the top gainers. It usually holds the mantle of being the top gainer. And this is every single day. Like today also, it is in the top five list and its price – around Rs.4. Yes, it is quoted even less than Rs.5!

And it is purely a “gimmick” or operator stock as it has no fundamentals to talk about. It is a Non Banking Financial Company (NBFC) having business of hire-purchase and lease financing for vehicles. It had ended Q1Fy16 with a net profit of Rs.65 lakh on a net sales of Rs.9 crore. This takes the cake though – promoters stake is a joke; it is at a meagre 0.10% and two promoters hold 6 lakh shares. Rest 99.90% is public float. Not a single FII or DII holds stake. And yet, it goes on to trap investors.

It’s a wonder how such stocks get traded at all in the first place! And that too making itself visible amongst the top gainers. So beware of this top gainer – every time, you see this name come up, you know what’s happening!