This penny stock rises over 600 percent in 3 months
Shares of Reliance Naval and Engineering Ltd, owned by the debt-ridden Anil Ambani group company, have shown tremendous growth in the past three months. At least the Indian stock market is witnessing a similar trend. Interestingly, since September 9, this penny stock has not recorded a single day of decline and its price has increased from 95 paise to Rs 7.67. This is the biggest gain in Reliance Naval & Engineering shares since its listing in 2009.
The revival of this shipyard is important for Anil Ambani, who strives for cash flows from government defense contracts. Prime Minister Narendra Modi plans to spend billions of dollars on national security and Reliance Naval wants to take advantage of it. Stock market brokers say that the rise in Reliance Naval shares is probably a result of speculators. It has nothing to do with the future of the company.
Arun Kejriwal, director of KRIS, a Mumbai-based investment advisory firm, said this could be a purely betting move with vested interest by some market operators as there has been no change in the company’s fundamentals. Reliance Naval & Engineering suffers from various problems. He said that since the company’s share prices are very low, it is quite easy to use such triggers to increase the price.
On the other hand, the Insolvency Tribunal is considering placing Reliance Naval as a bankrupt as lenders like IDBI Bank have decided not to restructure the company’s debt. Despite the recent rise in the company’s shares, the company shares have fallen by 50 per cent this year.
Listed in the stock market in 2009
Reliance Naval & Engineering Limited was listed on the stock exchange in 2009. The company’s share price was 95 paise on September 9, closing at its lowest level. Since then, the company’s stock has been running at a price of Rs 7.31.
Company banking on government contracts
The company hopes to get several defense contracts from the central government soon. This is because the government is soon going to sign billions of rupees with many companies. However, this may not happen given the poor economic condition of the group.
