Sebi ban pinches penny stocks

In the past one month, the Securities and Exchange Board of India (Sebi) has tightened its noose against the companies involved in price manipulation. Since then these scrips have been sinking on the bourses.

The Sebi has passed interim orders against six penny stocks banning their promoters and directors, brokers and clients from dealing in these securities The share price of these stocks have been hitting the lower end of the circuit every day.

For instance, the share price of IFSL is down at Rs 5.30 from Rs 27.5, down 80 per cent since the Sebi passed an order banning the company's promoters from dealing in the company's shares on September 28. Another stock, Prime Property Development has lost 51.12 per cent, falling from Rs 190.35 to Rs 93.05.
 

DOWN IN THE DUMPS
	Sebi orders passed		25-Oct-05  Price (Rs)	Change  in %
	Date	Price (Rs)
IFSL	28-Sep	27.05	5.30	-80.41
Prime Property	30-Sep	190.35	93.05	-51.12
Minal Engg	28-Sep	271.75	139.75	-48.57
Eltrol Ltd	5-Oct	1.67	1.02	-38.92
Ind Tra Deco	5-Oct	1.23	0.71	-42.28
Konkan Tyres	30-Sep	13.65	7.81	-42.78
Mega Corporation	24-Oct	16.20	15.40	-4.94

Similarly, Minal Engineering, which was quoting at Rs 271 on September 28, when the Sebi passed the order, has since fallen by 48.57 per cent to Rs 139.75. Eltrol and Ind Tra Deco which were trading at less than Rs 2 are now moving further down. Konkan Tyres has declined from Rs 13.65 to Rs 7.81, losing nearly 43 per cent.

Not just these, most of the penny stocks have seen sharp declines on the bourses. "Investors are cautious of penny stocks currently as the series of orders passed by Sebi sends a clear message that price manipulation is rampant in the market and buyers need to watch out," said a dealer.

In the past one month, the BSE small-cap index has lost over 20 per cent while the Sensex lost only 6 per cent. "Even liquidity in the penny cap counters has been drying up with stocks often getting locked at the lower end of the circuit filter, leaving little scope for trading," added the dealer.