5 penny stocks that made investors rich in 2016

Penny stocks often come with high risk and are considered highly speculative because of their lack of liquidity, large bid-ask spreads, small capitalization and limited following and disclosure. 

Generally, a penny stock trades outside the major market exchanges at a relatively low price and has a small market capitalisation. 

According to a blog named "smart money goal", around 25% of BSE and 10% of NSE are penny stocks. 

"While many penny stocks performed very well in 2016 in terms of % change, it's best to filter out those whose market cap is not sufficiently high. One filter to use is to ensure that the market cap of the company is at least 50 crore," Raghu Kumar, Director, Upstox, said. 

Based on Kumar's calculation, these five companies gave highest returns in this year.

The shares of Century Extrusions Limited, aluminium extrusion manufacturer, on December 28, 2015 were trading at Rs 2.82 per share and touched a high at Rs 10.38 per share, giving returns of 268.05% to the investors.  

MPS Infotecnics, or Visesh Infotecnics, IT solution providing company, on Decmber 28, 2015, the shares were trading at Rs 0.08 per piece. The shares touched a 52-week high at Rs 0.34 giving returns of 325% to its investors. 

Oil Refining and petrochemical company, Cals Refineries' shares on December 28, 2015 were trading at Rs 0.07. This year, it touched a 52-week high at Rs 0.29 giving returns of 314.2% to investors.

The shares of textile company, Spentex Industries, on Decmber 28, 2015, were trading at Rs 3.78. In 2016, the shares touched a 52-week high at Rs 8.39, giving returns of 121% to investors in one year.

Rana Sugar, agro-based company owned by Rana Group, the shares on December 28, 2015, were trading at Rs 3.9 per share. It touched a 52-week high at Rs 17.67 per share, giving return of 353% to investors in a year.