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What if market price of share goes 0

Date: 07 Jun 2016    Group: Finance and Investments    Category: Stock Market   

I have bought 8350 shares of Prakash Steelage Limited @7.42/- on 26.04.2016 and the current market price of the share is Rs.2.60.
If the market price will go 0 then what will happen? Will I lose my total investment? Should I have to hold this share are sell it out?
Awaiting advice from experts.

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Author: Kailash Kumar    08 Jun 2016      Member Level: Platinum     Points : 1  (Rs 1)    Voting Score: 0

It will depend on the actual condition of the company concerned. The author will have to dig deep into the happenings going on in the company. Was it a new company and a new project was to be launched. The company may still be in the developing stage and have not yet started the productive activities. In such cases there may be a turn around after few years.

Author: Mahesh    09 Jun 2016      Member Level: Gold     Points : 2  (Rs 2)    Voting Score: 0

In theory if the company is not bankrupt and shares are still being purchased then price of going down won't cause any issue. However price going below in paise would be alarming. So in such case it'd be treated like penny stock. So it may not offer some strong funding from other financial ventures. In practice many companies go down in pennies or say paise cost. So it should not be a problem. But when it touches zero then in theory it is as good as low income company and shares won't get sold. New companies have such situation for decade in some cases. And unless they get developed into better corporations, the price of share won't be increases and often goes down.

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