Over the past three months, 11 penny stocks have plunged between 50% and 80%. These underperformers were identified using a targeted screen that focused on stocks with a market capitalisation below Rs 1,000 crore, a share price under Rs 20, and a minimum recent trading volume of 5 lakh shares, highlighting low-priced, actively traded stocks that have seen sharp declines. (Data source: ACE Equity)While penny stocks often attract investors with low entry prices and the lure of quick gains, they carry significant risks. Low liquidity, high volatility and limited transparency make them prone to manipulation and sudden price swings. Without a clear strategy and strong risk controls, losses can quickly outweigh gains. Deep Cuts

14 penny stocks crash up to 80% in three months. Check full list here

Penny Stocks Plunge: 11 Underperformers Over Past Three Months

A recent analysis of Indian penny stocks has revealed 11 underperformers that have plummeted between 50% and 80% over the past three months.

The underperformers were identified using a targeted screen that focused on stocks with a market capitalization below Rs 1,000 crore, a share price under Rs 20, and a minimum recent trading volume of 5 lakh shares.

Risks Associated with Penny Stocks

Low Liquidity: Penny stocks often experience low trading volumes, making it difficult to buy or sell stocks without significantly impacting the stock price.
High Volatility: Penny stocks are known for their unpredictable price swings, which can make it challenging for investors to anticipate market movements.
Limited Transparency: Many penny stocks lack adequate financial reporting, making it difficult for investors to make informed decisions.
Manipulation: The lack of transparency and low liquidity in penny stocks makes them susceptible to manipulation by individuals or groups.

While penny stocks may attract investors with low entry prices and the promise of quick gains, it's essential to exercise caution and develop a clear strategy with strong risk controls to mitigate potential losses.