Penny stocks have a negative connotation in India but not all penny stocks are bad. Some are genuinely good business models but have been on the wrong side of value for factors beyond their control. The very concept of penny stocks is very fluid and open to interpretation. In the US, these are stocks quoting below $20. In the Indian context, stocks quoting under Rs.20 are normally classified as penny stocks. There are some amazing penny stock success stories in India. Eicher, Crompton Greaves, SAIL were all penny stocks which became multi-baggers. But the key question is how to identify them and trade them?