Astronomical gains in penny stocks under Sebi lens

India's markets regulator is keeping a watch on penny stocks and micro-cap companies that have returned exponential gains in a short period, according to a senior official aware of the development, as the watchdog continues to increase scrutiny to protect small investors.

- Neha Joshi

NEW DELHI:

Astronomical share price rises could signal speculative trading, posing risks to retail investors, particularly those new to the stock market, the official said on the condition of anonymity. The Securities and Exchange Board of India (Sebi), the official said, aims to protect investors through targeted enforcement. But as the regulator cannot monitor every small company or suspicious activity, it also aims to protect investors through education, the official said. "The regulator is doing its best to ensure investors are protected. The orders of the regulator carry a message for investors, but they should check these orders."