Penny stock zooms to Rs 55,000 on BSE

Ahmedabad-based KGN Industries, a 'Z' group share that was re-listed at Rs 100 on the Bombay Stock Exchange (BSE) on Wednesday after over seven years, witnessed a mammoth intra-day high of Rs 55,000 on minuscule volumes of 827 shares.

Although the BSE suspended trading in the share at 12.20 pm on Wednesday, the exchange said trading would resume at usual on Thursday.

"Further investigations are being carried out to examine the placing of orders at unrealistic prices and appropriate action, if any, will be initiated against the entities concerned," said a BSE spokesperson.

The spokesperson added that none of the trades conducted today were nullified and would be honoured. The counter, however, would attract a circuit filter of 5 per cent and would be under the trade-to-trade group.

The opening price for the stock on Thursday will be Rs 5,216.30, an average price set by BSE.

A KGN spokesperson said the company was also shocked by the price spurt. "We, too, called the exchange and asked them to look into the matter," the spokesperson said.

KGN Industries, a non-banking financial company (NBFC) before its suspension, is jointly owned by Arif Memon and Ismail Memon and is located at Navrangpura in Ahmedabad. Trading in the company's stock was suspended on 2001 after it failed to fulfil compliance issues with the exchange. Currently, the company trades in castor oil.