Last Updated on 4 days ago by Raj Kumar
What is Penny stock
Penny is often referred to something which is very cheap to afford. So the stocks which are very low in stock price are know as Penny stocks.
The term ‘Penny stocks’ has 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 which traded below $1 per share but SEC (Securities and Exchange Commission) has changed the definition to include shares up to $5 to be 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 its 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:-
What is penny stocks in India?
Although there is no definition of penny stock in India as a general consensus in Indian stock markets, any stock that trades below Rs 50 is considered as 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 India for their investment preference and look for mainly zero debt companies to find safe heavens 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 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.
Full list top 100 best penny stocks to buy in India – NSE / BSE – August 2021
|COMPANY / Stock||SECTOR – INDUSTRY||Price||Market CAP(Rs Cr.)|
|Indian Railway Finance Corporation Ltd.||Others||23||30,058|
|NHPC||Power Generation – Hydro||26.25||26,368|
|Vodafone Idea||Telecommunications – Service||8.25||23,707|
|GMR Infra||Infrastructure – Diversified||28.4||17,142|
|SJVN||Power Generation – Hydro||27.25||10,709|
|Trident Ltd||Textiles – Furnishings/|
|HUDCO||NBFC – Housing||45.25||9,059|
|Tata Tele||Telecommunications – Service||37.95||7,419|
|Shree Ren Sug||Sugar||34.25||7,290|
|TV18 Broadcast||TV Broadcasting & |
|Rail Vikas Nigam||Construction & Contracting||29.6||6,172|
|Infibeam Avenues||Online Service/Marketplace||44.05||5,863|
|Suzlon Energy||Power Generation – Wind||6.3||5,572|
|Network18 Media||Media & Entertainment – Holding||50||5,235|
|GTL Infra||Telecommunications |
– Allied Services
|HMT Ltd||Auto – Tractors||34.4||4,142|
|Ircon Intl.||Construction & Engineering||43.95||4,134|
|RattanIndia Power||Power Generation – Thermal||6.5||3,491|
|Lemon Tree Hotels||Hotels & Resorts||41.2||3,264|
|IFCI||Term Lending – General||14.4||2,940|
|Brightcom Group||IT Consulting & Software||45.55||2,737|
|Dish TV India||Cable/DTH||14.05||2,587|
|Bajaj Hindusthan Su||Sugar||18.9||2,414|
|Centrum Capital||NBFC – Diversified||49.55||2,061|
|Hind Const Co||Construction & Contracting||11.65||1,763|
|Future Consumer||FMCG Diversified||8.25||1,639|
|IndiaPowerCorp||Power – Integrated||16.25||1,582|
|3i Infotech||IT Consulting & Software||9.3||1,503|
|MTNL||Telecommunications – Service||21.2||1,336|
|PTC Financial||Term Lending – Power||20.45||1,313|
|DCW Ltd||Petrochem – Others||40.75||1,064|
|Sadbhav Infra||Infrastructure – Diversified||28.2||993|
|Andhra Cements||Cement – South||32.25||947|
|Texmaco Rail||Capital Goods – Railway||35.65||892|
|Music Broadcast||Radio Broadcasting & Entertainment||24.75||856|
|Coffee Day Ent||Restaurant & QSR||40.5||856|
|Gayatri Project||Infrastructure – Roads/Tolls||43.9||822|
|Nectar Lifesc||Pharma – Indian||35.2||789|
|Navkar Corp||Warehousing/Supply Chain/|
|Oswal Green Tech||Financial Services – Misc||28.7||737|
|Patel Eng||Construction & Contracting||15||719|
|HT Media||Print Media||30.75||716|
|Parsvnath Dev.||Real Estate||15.85||690|
|Orient Paper||Paper Manufacturer||31.55||669|
|Oriental Hotels||Hotels & Resorts||37.4||668|
|HLV Ltd.||Hotels & Resorts||10.1||637|
|DB Realty||Real Estate||25.65||624|
|Future Enterprises (DVR)||Diversified||13.4||610|
|Pennar Ind||Steel – CR/HR Strips||40.95||582|
|B L Kashyap||Construction & Contracting||25.25||569|
|Zee Media Corp||TV Broadcasting & |
|Tilaknagar Ind||Beverages & Distilleries||39.75||554|
|Gokul Agro Resources||Edible Oils & Solvent Extraction||41||541|
|Prozone Intu Proper||Real Estate||34.4||525|
|HCL Infosystems||IT Networking Equipment||15.65||515|
|Zee Learn||Coaching/Study Material/|
|Shriram EPC||Project Consultancy/|
|Suvidhaa Infoserve Ltd.||Others||24.1||490|
|MSP Steel||Steel – Sponge Iron||11.85||457|
|Vipul Ltd||Real Estate||37.65||452|
|Trans & Rectif||Power – |
|Pudumjee Paper Prod||Paper Manufacturer||45.3||430|
|MEP Infrastructure||Infrastructure – Roads/Tolls||23.1||424|
|Peninsula Land||Real Estate||14.95||417|
|Orient Abrasive||Abrasives And |
|Birla Tyres||Tyres & Tubes||28.9||412|
|Hind Nat Glass||Glass – Consumer||45.6||408|
|ISMT Ltd||Steel – Rolling||27.3||400|
|Vascon Engineer||Construction & Contracting||21.7||395|
|Ashima Ltd||Textiles – Spinning |
– Cotton Blended
|Ugar Sugar Work||Sugar||33.55||377|
|FCS Software||IT Consulting & Software||2.2||376|
|Shree Rama News||Paper Manufacturer||24.7||364|
|McLeod Russel||Tea / Coffee||33.9||354|
|Urja Global||Project Consultancy/Turnkey||6.35||354|
|Shyam Century Ferro||Ferro Alloys||15.85||352|
|Paramount Comm||Cables – Power/Others||17.65||343|
|Sarla Perform||Textiles – Processing/|
|OM Metal Infra||Diversified||33.3||321|
|Airan Ltd.||IT Enabled Services||25.3||316|
|Lloyds Steels||Steel – Others||3.4||306|
|Genus Paper Boards||Paper Manufacturer||11.85||305|
|Gokul Refoils||Edible Oils & |
|Ginni Filaments||Textiles – Spinning |
– Cotton Blended
|Inventure Grwth||Financial Services – Misc||3.55||298|
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 higher market cap.
FAQ on Penny stocks in India
Is it good to invest in Penny stocks in India?
In general Penny stocks are volatile, illiquid, and mainly operator driven. But not all stocks are the same. There are some good quality stocks which trade under 50 rupees stock price and are good companies to invest in.
You need to find out the details of the stock before you make any investment decisions. There are many good companies that offer excellent growth potential while their stock prices are under Rs 50.
Are Penny stocks cheap?
Stocks under the prices of Rs 50 referred to as 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 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 are 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
Which penny stock in India have a high market cap?
Below are some companies whose share price are of Penny stock type but they have high market capitalisation.
Indian Railway Finance Corporation Ltd.
Rail Vikas Nigam
Shree Ren Sug
Lemon Tree Hotels
Dish TV India
Which are some famous Penny stocks in India?
Some of the stocks which have got a lot of limelight in recent years are:-
Many of these companies are huge wealth destructive. So please do a careful analysis before investing in these companies.
Why are Penny stocks famous among retails investors?
The lower price of a stock price attracts many retail investors. They think that the lower price of a stock means the stock is cheap and give multibagger returns. Unfortunately, they get trapped into an investment which most of the time turns out to be loss-making.
Which Penny stocks are available below 1 Rupee?
Below are the list of stocks which are available below 1 rupee.
Nitin Fire Prot
Splendid Metal Pdts