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A viral gesture has triggered speculative buying on Dalal Street, sending a small-cap Indian stock soaring on a case of mistaken identity.

Shares of Parle Industries Ltd locked into their maximum daily trading limit for the third consecutive session on Friday. The buying frenzy began after Italian Prime Minister Giorgia Meloni shared a video on social media platform X. In the clip, Indian Prime Minister Narendra Modi is seen gifting her a packet of Melody toffees during his visit to Italy, acknowledging the popular "#Melodi" internet meme.

The video quickly accumulated millions of views globally. Shortly after, retail day-traders rushed to buy shares of Parle Industries. They mistakenly believed the company was the manufacturer of the famous chocolate-caramel candy.

Parle Industries Ltd jumped 15% across three days, with the stock price settling at Rs 5.51 after hitting its daily 5% upper circuit multiple times. Over 8 lakh shares changed hands on the BSE during the peak of the momentum, pushing the firm's total market valuation to over Rs 25 crore.

However, exchange filings reveal that the listed company has absolutely no connection to the confectioneries. Melody toffees, alongside household brands like Parle-G biscuits, Monaco, and Hide & Seek, are manufactured by Parle Products. Founded in 1929, Parle Products is a privately held fast-moving consumer goods (FMCG) giant and is not traded publicly on any stock exchange.

The listed entity Parle Industries Ltd operates as a diversified commercial services provider. Its core operations focus on infrastructure development, real estate, and paper waste recycling.

Penny Stock Hype

Despite the recent double-digit weekly gain, the broader long-term trajectory for Parle Industries remains weak. The micro-cap stock is still down significantly since the beginning of the year and has shed over 65% of its value over the past 12 months. Financial advisors expect immediate profit-booking and sharp downside volatility once the viral social media hype cools down.

Ironically, while retail investors piled into the wrong asset, institutional interest in the actual brand is brewing. International financing reports indicate that the unlisted Parle Products has separately initiated preliminary discussions with investment banks to explore a massive $1 billion initial public offering (IPO) in India.