While Indian stock markets experienced a widespread sharp decline today, real estate company Kretto Syscon Limited once again surprised investors.
Penny Stock: As global stock markets tremble under geopolitical tensions and the BSE Sensex opens with a decline of hundreds of points, one stock has caught investors' attention. Shares of real estate company Kretto Syscon Ltd have hit the upper circuit limit of five percent for two consecutive days. On Monday, this ₹2 stock once again surprised investors as soon as the market opened.
Market Down, But This Stock Shines
Monday morning saw the stock market open deep in the red. The BSE Sensex opened with a fall of nearly 900 points, reflecting global volatility. Despite this, Kretto Syscon's share price, after opening at ₹2.14, quickly reached ₹2.15, its high for the day. This represented a five percent increase over the previous session, pushing the stock to its upper circuit limit.
What's Driving Kretto Syscon's Surge?
The primary reason behind this surge is the company's upcoming board meeting scheduled for July 15, 2025. In this meeting, the company may consider a proposal to issue a 100 percent dividend and bonus shares. Hints of this proposal have created excitement in the market.
According to information provided by the company to the stock exchange, this proposal will depend on the company's distributable reserves, regulatory approvals, and shareholder approval. However, such significant announcements in a low-priced stock inevitably attract investor attention.
New Ahmedabad Project Fuels Speculation
The company recently entered into a joint venture agreement with B Devasya Design and Buildcon Private Limited to develop a new real estate project in the Ghumi, Manipur Road area of Ahmedabad, Gujarat. This area is rapidly developing and known for affordable residential and commercial projects.
This project has generated positive investor sentiment due to its potential to boost the company's revenue and profit prospects.
Strong Financial Performance Adds Momentum
Kretto Syscon's results for the fiscal year ended March 31, 2025, are highly impressive. The company's net profit increased from ₹25.43 lakh to ₹4.13 crore, a nearly 15-fold increase. Similarly, the company's total income rose from ₹70.2 lakh to ₹11.70 crore, approximately a 16-fold increase.
This robust financial growth has boosted investor confidence and fueled further investment in the stock.
Bonus Share and Dividend Expectations Fuel Rally
Investors are highly enthusiastic about the possibility of bonus shares and a 100 percent dividend at the announced board meeting. If bonus shares are issued, investors will receive additional shares for each share they hold, increasing their holdings' value.
Furthermore, a dividend of ₹1 per share (at a face value of ₹1) would mean a very attractive dividend yield at the current price. However, this all hinges on shareholder approval and regulatory clearance, but the potential has already sent the share price soaring.
A ₹2 Share, But Strong Momentum
The stock closed at ₹2.05 on Friday, also hitting its upper circuit limit that day. Reaching ₹2.15 on Monday marked a second consecutive day at the five percent upper limit.
Despite its low price, the rapid increase has attracted retail investors' attention. While low-priced stocks are typically volatile, this surge appears more organized and genuine due to the company's recent activities.
Trading Window Closed, Preventing Insider Trading
The company has clarified that its trading window has been closed since June 20, 2025, in accordance with SEBI's insider trading regulations, prior to the bonus and dividend announcement. This window will reopen 48 hours after the board meeting concludes and the results are disclosed to the stock exchange.
This step aims to ensure that no confidential information is misused.
Expert Opinion: Exercise Caution
Market experts believe that while Kretto Syscon's stock currently looks attractive, the risks associated with such low-priced stocks are equally high, especially when the company's liquidity is low, and trading volume is limited.
Experts advise investors to consider the company's fundamentals, management credibility, and long-term plans before investing in such stocks. Investing a significant portion of one's capital based solely on a news item or a price surge can be risky.
