15 Days Price Change
Summary
We all have heard the term Illiquid Stocks many times but most people get confused about what exactly they are.
In simple words, illiquid stocks are those which are not actively traded in the market. This means they have very low trading volume, because of it the number of buyers and sellers for these stocks are very less.
Because of this buying or selling such stocks takes time as it is difficult to find someone on the other side of the trade.
Lets understand the other aspects of illiquid stocks.
Illiquid Stocks are mostly found in
- Small-cap / Micro-cap companies - Companies with less than 500 cr market cap (low visibility in the market).
- Penny stocks - The stocks with very low demand and are sold at very low prices.
- Companies under financial stress or with poor corporate governance - The companies which are going through bad financial conditions (heavy debt) or having problems in management.
How to Identify Illiquid Stocks?
- Low price - Very cheap compared to big companies but not necessary if the market cap is more than 1000cr
- High risk, high return - Prices can double in days but also can crash to zero very quickly.
- Low liquidity - Difficult to sell, as very few buyers exist.
- Speculative nature - Prices often move on rumors and not on the fundamentals.
- Lack of information - Very limited financial data available or analyst coverage.
How Can Illiquidity Affect Your Investment?
- Difficulty in selling - You may not find a buyer when you want to exit from the stock and it may take time.
- Forced to sell at discount - Wide bid and ask spread reduces your profit. For example - There is a stock of 2rs, buyer wants to buy it at 1rs and seller want to sell it at 2rs means buyer wants it at 50% discount, so it can be tough for the seller to sell it at that price, he may not sell it at that price or may have to sell it at discount.
- Volatility risk - Price may go up and down very quickly within small trades because volume is low.
Conclusion
Illiquid unlisted stocks may look attractive because they are cheap or less explored but buying them comes with challenges since these stocks have very low trading volumes, so it becomes difficult to quickly find a buyer or seller. For long-term investors who have done a proper research and can patiently hold them. The illiquid stocks might sometimes turn into hidden gems. However for beginners or those who want quick entry and exit they can be risky, as you may get stuck without being able to sell them at the right time.
In short - Be careful while investing in illiquid unlisted stocks because sometimes it becomes very difficult to sell them and If you want to explore such opportunities in a safer and more guided way then you can check platforms like Sharescart, which specializes in unlisted shares.
Sell or Purchase Share (Tentative Price)
| Company | Industry | Stock P/E | P/B | Company rating | MCAP (in Cr.) | Current Price |
|---|---|---|---|---|---|---|
| Pharmeasy | e-Commerce | -1.8 | 1.8 | 4659 | 7.3 | |
| Reliance Retail | Retailing | 141.5 | 23 | 698659 | 1400 | |
| Orbis Financial | Finance - Investment | 45.2 | 9.3 | 6391 | 525 |
It is a leading global provider of BPO and IT services. Hexaware Technologies Limited provides IT consulting, software development, and business process services.
Unique Features
Incorporated in 2019, The company operates a consumer healthcare app called PharmEasy that enables the home delivery of pharmaceutical products.
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Sterlite Power began on 5th May 2015 and is headquartered in Delhi. It is a leading developer & solution provider in integrated power transmission.
Unique Features
Incorporated in 2015. Signify is into the manufacturing of electric lights and light fixtures for consumers and professionals.
Unique Features
CSK is a subsidiary brand of India Cements. This company is quite popular in India as it known for its cricket team.
Unique Features
Elcid Investments Limited was incorporated on 3 December 1981 in Mumbai. It is a Non-Banking Finance Company registered with the Reserve Bank of India.
Unique Features
STUDDS is a leading manufacturer of motorcycle accessories and helmets. They become the largest helmet manufacturer (two-wheeler) in the world.
Unique Features
Mohan Meakin manufactures alcoholic beverages such as rum, whisky, beer, etc., and non-alcoholic beverages like apple juice, mineral water, etc.
Unique Features
Orbis is recognized as a leading player in the Financial Services Industry, providing Securities Services since 2009 to FDI, Corporate, HNI's.
Unique Features
Schneider Electric President Systems Limited is a designer, manufacturer and supplier of customized enclosure systems for over 30 years.
Unique Features
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