After SEBI outlook on NCLT stocks, is it still good to hold them?

SEBI may soon ban trading on NCLT stocks!

A problem or you can say a difficulty which you can soon face related to your holdings in NCLT stocks is that SEBI is looking for banning trading on NCLT companies. To improve laws and working of stock market and especially for those investors or traders, who generally get trapped in such NCLT companies, SEBI may soon ban trading on such stocks whose businesses are on sale through NCLT route. As of now, there is no clarity on whether the SEBI will ban trading on NPA Scrips or not. However, I think if we see the attachment and interest of large number of investors in NPA stocks, ban on NCLT companies will be against their faith on stock market. And from this point of view, i don’t feel that SEBI will ban such scrips.

So what should you do now in NCLT stocks?

As we all are living in a place of uncertainty, we don’t know exactly whether their would a BAN soon or not. However to play a safe game, I would recommend and suggest not to deploy all of your money in such companies. You can Invest around 10-15 percent of your total portfolio in such stocks. Or you can also choose to invest at that rate which you feel comfortable. But before investing in such stocks, be prepare yourself that your all invested money could also wipe out in short-term. So that, if the SEBI really bans trading on such securities, you would not feel sorry for yourself at that time.

One more think that I want to share to all my readers who are reading this post is that I also holds some shares of NCLT companies. Around 5-8 percent of my portfolio consist of such stocks and after news of SEBI outlook on NCLT companies and their stocks, I have just stopped buying these stocks in large amount. I am just waiting until the clarification and final outcome from SEBI board on NCLT companies. However, in case if positive outcome would be there from SEBI board, then it would be beneficial for all those who have taken the risk of holding these stocks for short-term.

One more thing that I want to clarify from this post is as of now, only those companies which are on sale by its lenders through NCLT mode will see ban on their stocks on exchanges. Those stocks or companies who are in discussions in full settlement of Loans with their lenders will not face any difficulty related to their stocks listed on exchanges.

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