What is Penny stock? – Top 100 best penny stocks list to buy in India

This post was most recently updated on November 17th, 2022

Penny stocks are one of the most volatile and risky investments that an individual can make. A penny stock is defined as a stock that trades for less than $5 per share. While penny stocks may seem like a bargain, they are often very speculative and risky. In this article, let’s look at the top 100 Penny stocks list in India.

Penny stocks are often times not well-known companies with little to no earnings and are often times not listed on a major exchange. This lack of information and liquidity can make it very difficult to trade penny stocks.

Penny stocks are also subject to manipulation by large investors, who can easily move the price of the stock up or down. This volatility can make it very difficult for an investor to make money in penny stocks. Overall, penny stocks are a very speculative and risky investment, and should only be considered by investors who are willing to lose their entire investment.

What is a Penny stock?

Penny is often referred to as something which is very cheap to afford. So the stocks which are very low in stock price are known as Penny stocks.

The term ‘Penny stocks’ originated from the west. A penny stock refers to a small company’s stock that typically trades for less than $5 per share. In the grand old days, Penny stocks were the stocks that traded below $1 per share but SEC (Securities and Exchange Commission) has changed the definition to include shares up to $5 to called a Penny stock.

History of Penny Stocks

As per NASDAQ; In the non-digital era, persons buying a stock were paying up as much as a quarter-point ($0.25) commission to buy or sell a share of stock regardless of the stock price whether it’s a $1 stock or a $100 stock.

So the Mutual funds at that time avoided buying Penny stocks to avoid the huge commission. This became a widespread notion to avoid the types of stocks to save on the commission.

Have a look at India’s famous investor’s portfolios here:-

Rakesh Jhunjhunwala Portfolio

Radhakishan Damani Portfolio

Porinju Veliyath portfolio

Vijay Kedia stocks portfolio

Nemish Shah stocks portfolio

Mohnish Pabrai Stocks Portfolio

Ashish Kacholia stocks portfolio

Dolly Khanna portfolio

What are penny stocks in India?

Although there is no definition of penny stocks in India as a general consensus in Indian stock markets, any stock that trades below Rs 50 is considered a Penny stock in India. These stocks are generally volatile with their stock price, il-liquid, and have got stock market operator’s involvement.

Although many retail investors try to stick to Blue chip stocks in India for their investment preference and look for mainly zero debt companies to find safe havens but recently its seen that there is an appetite to take risks and invest in Penny stocks in India. We will only look at the stocks which have stock prices higher than Rs 1.

You need to be extremely careful while investing in these types of stocks as they are highly risky and you may lose your entire capital. History shows that investing in stocks just because they are available under Rs 50 doesn’t mean that the stock will give higher returns.

Top 100 best penny stocks list to buy today in India – NSE / BSE – 2022

Here is the best Penny stocks list to buy in India –

The above list is not the complete list of Penny stocks; there are 500+ companies in NSE / BSE with stock prices less than Rs 50. We only picked stocks having a higher market cap.

Debt Free Penny Stocks List

Here are some penny stocks which are low in price and debt-free.

Penny Stocks list that Pay Highest Dividends

Here is the list of penny stocks that are low in price and pay good dividends.

Are Penny stocks cheap?

Stocks under the price of Rs 50 are referred to as Penny stocks and Penny stock is not always the cheapest.

The stock price of a stock doesn’t really reflect whether a stock is cheap or expensive. You need to examine whether the price you are paying for the stock is justified or not.

You need to evaluate the below things to find out whether the stock is cheap or expensive
What is the price-to-earnings ratio what is the book value of the stock what is the growth figure of the stock(in terms of sales, profit, margins, etc)

What is the debt on the book of the stock how is the management team of the stock what is the business potential of the stock?

FAQ on Penny stocks in India