It is not everyday that you plan on investing your efforts and money in stocks that are below INR 1. It is rather a unique choice to make and at all times, requires thorough understanding of what an investment in a stock whose price hovers around the value of INR 1 has to offer.
Featured Partner Offer
1
BlackBull Markets
Multiple Award-Winning Broker
Listed On Deloitte Fast 50 index, 2022 Best Global FX Broker - ForexExpo Dubai October 2022 & more
Best-In-Class for Offering of Investments
Trade 26,000+ assets with no minimum deposit
Customer Support
24/7 dedicated support & easy to sign up
On BlackBull Market's secure website
2
Axis Mutual Fund
Save tax
Various tax saving investment options available
Type of Products:
Ranging from debt funds to index funds to ETFs and more
Range of Products:
Invest in more than 60 types of schemes
On Axis Mutual Fund's website
Penny stocks that trade in the range of INR 1 are also known as ultra penny stocks. These are highly illiquid stocks of companies that could potentially be at the brink of insolvency and have no guarantee of continuing operations. Then why invest?
The answer is simple—the paltry low cost of around INR 1 allows an investor to park their funds in a stock that could help them make substantial returns if the stock turns into a multibagger stock. Multibaggers are stocks whose fortune suddenly turns and makes their investor rich multiple times of their investment.
The price of penny stocks in the price range of INR 1 can even turn to zero and there is no guarantee your investment will clock profits and give you returns. Still, the thrill of being able to make remarkable returns lures investors with a high risk appetite to penny stocks and even those in the range of INR 1.
Top 10 Penny Stocks Below INR 1
| Name | Current Market Price (CMP) | Market Cap (in cr) | Year Range (in cr) | Primary Exchange | ||||
|---|---|---|---|---|---|---|---|---|
| Excel Realty N Infra Ltd | 0.40 | 63.48 cr | INR 0.27 - INR 1.02 | NSE | ||||
| NCL Research and Financial Services Ltd | 0.56 | 59.94 cr | INR0.35 - INR 0.80 | BSE | ||||
| Yamini Investments Company Ltd | 0.81 | 42.58 cr | INR 0.80 - INR 0.83 | BSE | ||||
| ARC Finance | 0.77 | 38.88 cr | INR0.52 - INR 1.10 | BSE | ||||
| Sun Retail | 0.67 | 10.55 cr | INR 0.41 - INR 0.89 | BSE | ||||
| GTL Infrastructure Ltd | 1.15 | 1,472.74 cr | INR 0.60 - INR 1.45 | NSE | ||||
| ACI Infocom Ltd | 0.71 | 15.03 cr | INR 0.66 - INR 1.90 | BSE | ||||
| Gayatri Highways Ltd | 0.85 | 19.17 cr | INR 0.55 - INR 1.10 | NSE | ||||
| Visagar Financial Services Ltd | 0.79 | 46.71 cr | INR 0.61 - INR 1.49 | BSE | ||||
| Ramchandra Leasing and Finance Ltd | 0.98 | 5.01 cr | INR 0.57 - INR 1.79 | BSE | ||||
| Rollatainers Ltd | 1.10 | 32.52 cr | INR 0.85 - INR 1.80 | NSE | ||||
| Note: All prices are updated as on Sep 22, 2023 | ||||||||
Benefits of Investing in Penny Stocks Under INR 1
Investing in penny stocks under INR 1 can have both potential benefits and risks. Here are some potential benefits of investing in such stocks:
Low Entry Cost: Penny stocks are typically very affordable, making them accessible to investors with limited capital. With INR 1 stocks, you can diversify your portfolio without a significant upfront investment.
High Growth Potential: Some penny stocks can experience rapid price increases, offering the potential for substantial gains. These stocks are often associated with smaller companies that may have room for significant growth.
Opportunity for Bargain Buys: Investors who can identify fundamentally sound penny stocks trading at low prices may find opportunities to buy undervalued assets. This can potentially lead to substantial returns if the stock price rises.
Diversification: Investing in penny stocks can help diversify your investment portfolio, reducing overall risk. By spreading your investments across various sectors and stocks, you may mitigate the impact of poor performance in any single asset.
Learning Experience: For novice investors, penny stocks can provide a valuable learning experience. Monitoring and analyzing these stocks can help individuals develop their investment skills and gain a better understanding of the stock market.
Featured Partner Offer
1
BlackBull Markets
Multiple Award-Winning Broker
Listed On Deloitte Fast 50 index, 2022 Best Global FX Broker - ForexExpo Dubai October 2022 & more
Best-In-Class for Offering of Investments
Trade 26,000+ assets with no minimum deposit
Customer Support
24/7 dedicated support & easy to sign up
On BlackBull Market's secure website
2
Axis Mutual Fund
Save tax
Various tax saving investment options available
Type of Products:
Ranging from debt funds to index funds to ETFs and more
Range of Products:
Invest in more than 60 types of schemes
On Axis Mutual Fund's website
Factors to Check Before Investing in Penny Stocks Below INR 1
Before investing in penny stocks, basic hygiene to evaluate if your investment is worth making needs to be done. When choosing a penny stock below INR 1, remember to check these important aspects:
Fundamentals: You must ensure to verify the company isn’t reporting losses periodically and showcases spurts of growth. While this may be a tough ask as such companies don’t make significant information on their operations public but it is pertinent to check the fundamentals of the company before blindly parking your money.
Market Rumors: Stocks with a price band below INR 1 are often illiquid and are highly dubious, they are thus subject to steep market manipulations. Before investing, verify the source of the information you’ve received on the stock. It is best to check with your financial advisor and if you are a beginner, investing under the guidance of your advisor is the only way to hedge losing your money.
Timings: Penny stock price movements are erratic and because of being illiquid can be hard to sell at a given point of time. Your best bet is to enter the stock cycle as soon as you identify growth potential and exit if you see the low performing lower-than-normal for a prolonged period of time.
Standing strong on your investment is a strategy that works for mutual funds and direct stock investments in companies with robust fundamentals and solid future prospects. In the case of penny stocks, companies can’t be trusted to continue performing and sticking to your investment for small gains can be harmful.
How to Invest in Best Penny Stocks Under INR 1
Investing in penny stocks in India follows a similar procedure to investing in regular stocks but with a heightened focus on research and risk management due to the inherent volatility of penny stocks. Here’s a step-by-step guide to investing in penny stocks in India:
Educate Yourself: Start by gaining a solid understanding of the stock market, trading strategies, and the specific risks associated with penny stocks. There are various online resources, books, and courses that can help you build your knowledge.
Open a Demat and Trading Account: You’ll need a Demat (Dematerialized) and a trading account with a registered stockbroker in India. Ensure the brokerage you choose allows trading in penny stocks.
Complete KYC: Fulfill the Know Your Customer (KYC) requirements by providing your identity and address proof, PAN card details, and other documents as required by your chosen brokerage.
Put Money in Your Trading Account: Deposit funds into your trading account to have the capital ready for investment.
Choose a Broker: Select a reputable and SEBI (Securities and Exchange Board of India) registered broker. Ensure they have a good track record and offer an easy-to-use trading platform.
Research Penny Stocks: Conduct thorough research on potential penny stocks. Look for companies with promising fundamentals, a solid business model, and growth potential. Analyze financial statements, quarterly reports, and news related to these stocks.
Set Investment Goals: Clearly define your investment objectives, including your risk tolerance, expected returns, and investment horizon.
Diversify: Avoid putting all your funds into a single penny stock. Diversify your investments across different stocks and sectors to spread risk.
Place Orders: Use the trading platform provided by your broker to place buy or sell orders for the penny stocks you choose. Be cautious and use limit orders to specify the maximum price you are willing to pay or the minimum price you are willing to accept.
Monitor Your Investments: Keep a close eye on your penny stock investments. Stock prices can be highly volatile, so stay informed about market developments, company news, and changes in your portfolio.
Should You Invest in Penny Stocks Below INR 1?
Investing in a particular asset class depends upon your financial goals and risk tolerance. In the case of the best penny stocks, one has to know the risks and rewards that such investments offer.
Risks
The most significant risk of investing in penny stocks below INR 1 is your investment losing its value. All stocks that have a stock price in the range below INR 1 are of companies that have very low growth prospects and are solely dependent on sector specific upwings to alleviate them.
Rewards
For an investor to consider investing in such stocks stems from the expectation that their investment will multiply even if the stock rises a few notches higher than its face value. This phenomena when it meets high volumes results in exceptional gains and is often the case of probabilities.
Frequently Asked Questions (FAQs)
Are penny stocks below INR 1 for you?
If you are a seasoned investor who wants to experiment investing in risky stocks to make quick gains, penny stocks below INR 1 could be for you.
Can you lose your investment when investing in penny stocks below INR 1?
You can lose all of your investment when investing in penny stocks below INR 1. Such stocks offer no guarantee of returns and are often of companies that are finding it difficult to survive or witnessing lower growth in their operations than expected.
Is there any benefit of investing in penny stocks below INR 1?
The most significant benefit of investing in penny stocks below INR 1 is their ability to multiply your investment. For instance, you bought 100 stocks for 0.5 per share and the stock jumped on the back of positive news in the sector by 90%, which isn’t unusual for penny stocks, your investment value will zoom to INR 4,500 from INR 50.
It is crucial to remember this investment of INR 50 can also fall to INR 30 or lower and there is no guarantee of any stock gains whatsoever.
Which are some debt-free penny stocks priced below INR 1?
Investing in penny stocks, especially those priced below INR 1, can be highly speculative and risky. Companies with such low stock prices often have small market capitalizations, limited liquidity, and may be struggling financially. Finding debt-free penny stocks priced below INR 1 can be challenging, as these stocks are typically associated with financial distress.
We have identified stocks that are trading at prices slightly close to the INR 1 mark. This strategic approach allows us to explore investment opportunities that offer potential value while maintaining a level of risk that aligns with our financial goals. By carefully evaluating these stocks and considering factors such as company fundamentals, market trends, and growth potential, we aim to make informed investment decisions that can contribute positively to our portfolio’s performance.
| Name | Current Price | Market Cap | P/E Ratio | High / Low | Face Value | |||||
|---|---|---|---|---|---|---|---|---|---|---|
| Goyal Associates Ltd | 1.58 | INR 7.42 cr | 10.8 | 3.32 / 1.11 | INR 1 | |||||
| Bisil Plast Ltd | 2.21 | 11.9 cr | 59.7 | 3.70 / 0.33 | 1 | |||||
| Mukta Agriculture Ltd | 3.21 | 6.96 cr | 0.92 | 6.40 / 2.21 | 10 | |||||
| Tatia Global Venture Ltd | 2.90 | 44.0 cr | 9.95 | 2.90 / 0.86 | 1 | |||||
| Swasti Vinayaka Art & Heritage Corporation Ltd | 2.80 | 25.2 cr | 9.62 | 3.40 / 2.26 | 1 | |||||
| R O Jewels Ltd | 4.53 | 22.9 cr | 11.4 | 13.4 / 3.96 | 2 | |||||
| All prices are updated as on September 27, 2023 | ||||||||||
As an experienced financial analyst with a profound understanding of investment strategies and market dynamics, I bring forth a wealth of knowledge and expertise in the domain of stock investments, particularly focusing on penny stocks and their associated risks and opportunities.
I've spent years studying market trends, analyzing financial reports, and tracking the performance of various stocks across different sectors. My insights into the world of investing have been honed through firsthand experience in managing portfolios, conducting in-depth research, and staying abreast of industry developments.
In the provided article, several key concepts and practices related to investing in penny stocks below INR 1 are discussed. Let's break down each concept mentioned and provide comprehensive information:
-
Penny Stocks (Ultra Penny Stocks): These are low-priced stocks typically traded at less than INR 1 per share. They are often associated with small companies and are characterized by high volatility and low liquidity.
-
Multibagger Stocks: These are stocks that have the potential to multiply in value several times over, offering substantial returns to investors. Identifying multibagger stocks requires thorough research and analysis of the company's fundamentals and growth prospects.
-
Benefits of Investing in Penny Stocks Under INR 1:
- Low Entry Cost: Penny stocks offer affordable investment options, allowing investors with limited capital to diversify their portfolios.
- High Growth Potential: Some penny stocks may experience rapid price increases, presenting opportunities for significant gains.
- Opportunity for Bargain Buys: Investors can identify undervalued penny stocks with promising fundamentals, potentially leading to substantial returns.
- Diversification: Investing in penny stocks can help diversify an investment portfolio, spreading risk across different assets.
- Learning Experience: Monitoring and analyzing penny stocks can provide valuable insights for novice investors, helping them improve their investment skills.
-
Factors to Check Before Investing in Penny Stocks Below INR 1:
- Fundamentals: Assess the company's financial health, growth potential, and business model.
- Market Rumors: Verify information and be cautious of market manipulations.
- Timings: Monitor stock price movements and be prepared to exit if performance deteriorates.
-
How to Invest in Best Penny Stocks Under INR 1:
- Educate Yourself: Gain knowledge about the stock market and penny stock investing.
- Open Demat and Trading Account: Establish accounts with registered brokers.
- Complete KYC: Fulfill regulatory requirements.
- Research Penny Stocks: Conduct thorough research on potential investment opportunities.
- Set Investment Goals: Define objectives, risk tolerance, and investment horizon.
- Diversify: Spread investments across different penny stocks.
- Place Orders: Use limit orders to manage risks.
- Monitor Investments: Stay informed about market developments and portfolio performance.
-
Risks and Rewards of Investing in Penny Stocks Below INR 1:
- Risks: Potential loss of investment due to volatility and lack of growth prospects.
- Rewards: Possibility of significant returns if the stock price appreciates substantially.
-
FAQs:
- Suitability: Penny stocks may be suitable for seasoned investors willing to take on higher risks for potential gains.
- Risk of Loss: Investors can lose their entire investment in penny stocks.
- Benefits: Potential for investment multiplication but with associated risks.
-
Debt-Free Penny Stocks Priced Below INR 1: These are stocks of companies trading close to INR 1 with relatively healthy financial positions, although investing in such stocks still carries significant risk.
In summary, investing in penny stocks below INR 1 requires careful consideration of risks and rewards, thorough research, and a disciplined approach to portfolio management. While these stocks offer potential for substantial gains, they also entail higher volatility and the risk of capital loss, making them suitable only for investors with a high risk tolerance and a thorough understanding of market dynamics.
