Penny stocks are the stocks that are traded at a low price, usually under Rupees 50. These stocks have low market capitalization and are usually illiquid. These are the lesser-known stocks to the larger public out there. Usually, these are less preferred by investors due to the limited information about the fundamentals, and businesses are unreliable or unavailable. But the best penny stocks in India are popularly known for generating multi-bagger stock, i.e. returns within a few trade sessions.
Since the stocks are illiquid, some of the few orders can hit the circuit limit on the exchange. These stocks hold the chances of giving higher returns when they are hitting the upper circuits for several days. Generally, these circuit periods of hitting circuits are not accompanied by trading volumes. This can happen due to some strong fundamental move. On other days, the reason can be manipulating the stock by stock operators.
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