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:-

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 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/ Terry Towels	20.65	10,523
HUDCO	NBFC – Housing	45.25	9,059
MRPL	Refineries	44.7	7,834
Tata Tele	Telecommunications – Service	37.95	7,419
Shree Ren Sug	Sugar	34.25	7,290
TV18 Broadcast	TV Broadcasting &  Software Production	39.05	6,695
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
Hathway Cable	Cable/DTH	26.05	4,611
GTL Infra	Telecommunications  – Allied Services	3.45	4,312
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
Electrostl Cast	Castings/Foundry	38.35	1,660
Future Consumer	FMCG Diversified	8.25	1,639
IndiaPowerCorp	Power – Integrated	16.25	1,582
Jayaswal Neco	Castings/Foundry	24.6	1,571
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
TARC Ltd.	Others	41.25	1,217
DCW Ltd	Petrochem – Others	40.75	1,064
Nagarjuna Fertilizer	Fertilisers	17	1,017
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
Arshiya	Warehousing/Supply Chain/ Road Transport	28.9	758
Navkar Corp	Warehousing/Supply Chain/ Road Transport	49.45	744
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 &  Software Production	11.85	558
Tilaknagar Ind	Beverages & Distilleries	39.75	554
Gokul Agro Resources	Edible Oils & Solvent Extraction	41	541
Madras Fert	Fertilisers	32.6	525
Prozone Intu Proper	Real Estate	34.4	525
HCL Infosystems	IT Networking Equipment	15.65	515
Oricon Enterpr	Diversified	32.7	514
Zee Learn	Coaching/Study Material/ Schools	15.4	502
Shriram EPC	Project Consultancy/ Turnkey	5.05	491
Suvidhaa Infoserve Ltd.	Others	24.1	490
Rana Sugars	Sugar	30.85	474
Future Enterprises	Diversified	10.35	471
MSP Steel	Steel – Sponge Iron	11.85	457
Vipul Ltd	Real Estate	37.65	452
Trans & Rectif	Power –  Transmission Equipment	33.85	449
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  Grinding Wheels	34.55	413
Birla Tyres	Tyres & Tubes	28.9	412
Hind Nat Glass	Glass – Consumer	45.6	408
ISMT Ltd	Steel – Rolling	27.3	400
Vikas Multicorp	Miscellaneous	4.3	399
Vascon Engineer	Construction & Contracting	21.7	395
Ashima Ltd	Textiles – Spinning  – Cotton Blended	19.75	379
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
GTL Ltd	Miscellaneous	21.85	344
Paramount Comm	Cables – Power/Others	17.65	343
Sarla Perform	Textiles – Processing/ Texturising	40.95	342
Commercial Engg	Miscellaneous	37	331
OM Metal Infra	Diversified	33.3	321
Kothari Sugars	Sugar	38.4	318
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 &  Solvent Extraction	30.55	302
Ginni Filaments	Textiles – Spinning  – Cotton Blended	37.85	300
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