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Over 20% stocks on BSE trade below face value

 The mayhem on the bourses, which continues unabated, has led to a massive fall in the stock prices, especially of those that lack fundamentals. The recent past has witnessed a spurt in the number of stocks that have even fallen below their face value. The percentage of such stocks is in excess of 20% of the total number of stocks traded (2,431) on the Bombay Stock Exchange (BSE).

According to FE Research Bureau, there are more than 500 stocks that are currently quoting below their face value. These stocks can be found in all the categories of stocks on the BSE except the A group, which comprises the top-most companies.

Experts are of the view that the recent correction has led to many midcap and smallcap stocks drop to astonishing levels due to the absence of any positive newsflow and fundamentals. According to them, such stocks are the first to rise during a bull run and also the first to fall during a bearish phase.

Jeetendra Gupta, AVP (research), Indiabulls Securities Ltd, said, “Most of the companies whose stock prices have gone below the face value lack any fundamentals. The book value might be running into losses. Most of these counters might have become highly illiquid.”

Meanwhile, the T group of stocks include the maximum number of stocks that are currently quoting below their face value. As on Wednesday, June 7, there were a total of 271 stocks whose prices have dipped below their face value. Interestingly, the T group comprises 541 stocks, which means that a little over 50% of T group stocks are below face value.

The B2 group comprises 136 stocks trading at levels below their face value. The B2 group comprises a total of 491 stocks. The Z group, which comprises non-compliant companies, houses over 50 stocks that have made it to the infamous list.

The Indonext platform or the S group has 18 stocks with prices below their face value.


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