Small-Cap Sensation: 28,840% Returns in 5 Years Spark Focus on Preferential Allotments

Small-cap stocks are making headlines with staggering returns, as seen in select companies leveraging preferential allotments for rapid growth. Infrastructure firm Hazoor Multi Projects Limited recently approved the allotment of 17.77 lakh equity shares to a domestic institutional investor, raising ₹3.99 crore. Such moves reflect strategic efforts to bolster financial positions and fund expansion projects.

Preferential allotments, which are quicker and cheaper than public offerings, have emerged as a preferred option for small-cap companies to bring in strategic investors with minimal equity dilution. The trend has helped some stocks reward investors with astronomical returns, such as the purported 28,840% increase in five years.

Investors are now paying close attention to insider involvement in these allocations, taking it as a sign of confidence in the firm's future prospects. The small-cap segment remains an area of high-risk, high-reward plays.

Source: Times Now, Business Standard