In Share market, there are various category of stocks which offers different kind of risk and return potential. One category of them is of Penny stocks.
In this Article
What are Penny Stocks?
Penny stocks are generally considered those stocks which trade in a single digit or penny price or those which have a very low Market Capital. Because of very low price, such kind of stocks are easily able to rise multifold times when a strong buying interest comes into them. However, because of low price, they can decline by a great percentage also when someone sell these stocks in good quantity.
Generally, a stock trading in penny price could be due to either very small size of the company, collapse of the business which resulted into heavy decline in shares, or financial problems. Whatever the reason could be, we must remember that such kind of scrips always carry good amount of risk and some carries huge risk also. Possibility of losing major part or even whole amount of invested money is always there.
In Indian Stock Market, many stocks are trading in Penny prices. But not all of them really worth for taking big risk. I have taken a look at most of the liquid Penny stocks and curated a list of Top Penny stocks for investors where they might have some chances of earning good returns. If you love taking Huge Risk for Big returns (Risk hai to Ishq hai 😏), then you should definitely take a look at these stocks….
List of Best Penny Stocks to Buy in India
| Company Name | Share Price (on 15/3/23) | Last 6month Performance | Industry |
|---|---|---|---|
| Reliance Power | ₹10.7 | (-42%) | Power Generation |
| Jaiprakash Power | ₹6.15 | (-25%) | Power Generation |
| South Indian Bank | ₹17.35 | +70% | Private Bank |
| Vodafone Idea | ₹6.45 | (-30%) | Telecom Services |
| HCC | ₹14.80 | +14% | Construction & Engineering |
| Dish TV | ₹14.75 | (-4%) | Cable & D2H |
| KM Sugar Mills | ₹25 | (-12%) | Sugar |
| Alankit Ltd | ₹8.45 | (-35%) | E-Governance & Financials |
| Piccadilly Agro Industries | ₹52 | +35% | Sugar |
| Orient Green | ₹8.85 | (-2%) | Renewable Energy |
| Genus Paper & Board | ₹14 | (-10.5%) | Paper Products |
| MSP Steel & Power | ₹8.4 | (-12%) | Iron & Steel |
| Jayaswal Neco Industries | ₹23 | (-29%) | Iron & Steel |
| GTL | ₹5.15 | (-42%) | Telecom Infrastructure |
| ASI Industries | ₹11.8 | (-14%) | Mining & Mineral |
| Syncom Formulations | ₹6.25 | (-23%) | Pharmaceutical |
| Pritika Auto | ₹15.2 | (-12%) | Auto Parts |
| Rajoo Engineers | ₹27.1 | (-16%) | Plastic Extrusion Machines |
| Hathway Cable | ₹14.3 | (-18%) | Cable TV & Broadband |
| Paramount Communications | ₹31 | +67% | Wire & Cable |
Business Details of Penny Shares
Dish TV
Dish TV is of the leading players in India in Direct-To-Home (DTH) business. Subscriber base of the company is more than 2.9 crore. The company has a vast distribution network of over 4,000 distributors and around 4,00,000 dealers that span across 9,450 towns in the country.
Genus Paper & Boards
Genus Paper & Boards is engaged in the business of manufacturing of Kraft Paper and M.S. Ingot. Kraft Paper is classified as Industrial paper and is used by the Packaging Industry in making corrugated boxes and liners, corrugated sacks, and composite containers. The use of Ingots goes into the Housing and Infrastructure sector.
GTL Limited
GTL Limited is a part of the Global Group Enterprise. It offers services and solutions to address the Network Life cycle requirements of Telecom Carriers and Technology Providers (OEMs). The worldwide offices are situated in USA, UK, India, Mauritius, Thailand, UAE, South Africa etc.
Also Read: Most Expensive Stocks of India having High Valuations!
HCC
Hindustan Construction Company or HCC, has been entrusted with the construction of high value projects across segments like Transportation, Power, Marine projects, Oil & Gas pipeline constructions, urban Infrastructure etc. In Power, HCC have constructed Hydroelectric, Nuclear, Thermal Gas and Diesel based Power Projects.
Alankit Limited
Headquartered at New Delhi, Alankit was established in 1995 as a Registrar & Share Transfer Agent (RTA) in India. Over the last 25 years, company has grown into an integrated service provider providing innovative solutions in Finance, e-Governance, Insurance and Healthcare verticals.
Alankit is engaged in the business of e-governance and sale of e-governance products. Recently, company has been empanelled as Service Provider for processing of Ayushman Bharat Card Request with National Health Authority, Ministry of Health & Family Welfare, Government of India.
Jaiprakash Power
Jaiprakash Power or JP Power, is a part of Noida based Jaypee Group. The company was incorporated in 1994 to set up and operate hydroelectric and Thermal Power projects and supply electricity from power plants in the country. Company current runs the largest hydroelectric power plant in the private sector in India. The company has an installed power generation capacity of 4,200 mw.
Hathway Cable
Hathway Cable & Datacom is a leading Cable Broadband service provider. It also provides Cable Television services through its wholly owned subsidiary – Hathway Digital Private Limited. Hathway Cable holds 37.32% shares in GTPL Hathway as an Strategic Investment. In 2018, Mukesh Ambani’s Reliance Industries had acquired majority stake in the Hathway Cable at a price of Rs 32 per share.
Paramount Communications
Paramount Communications is one of India’s leading wire & cable manufacturing company. Product Portfolio includes HV & LV Power Cables, Optical Fiber Cables & other Telecom Cables, Railway Cables, Specialised Cables, Instrumentation & Data Cables, Fire Survival Cables etc. Clients of company generally belongs to Power, Telecom, Railways, I.T. and Communication, Construction, Defence and Space Research sectors.
Beside of Manufactured goods business (cables), Paramount Cables also provides an integrated range of project services (EPC services) on their own as well as in association with other established equipment manufacturers and construction companies in India and internationally.
Pritika Auto
Incorporated in 1980, company was initially setup with the name of Shivkrupa Machineries and Engineering services. Later, name was changed to Pritika Auto Industries in 2017.
Pritika Auto Industries is an Indian company engaged in the business of manufacturing tractor and automobile components. The company sells alloys, castings, automobile parts, machine tools, tractor parts as well as engineering goods and accessories like bolts and nuts, screws for motor vehicles and component parts.
Jayaswal Neco Industries
Jayaswal Neco Industries is engaged in the manufacturing and supply of Iron and Steel castings. It is specialized in the manufacturing of grey iron castings for railway tracks, brake blocks, bearing plates and municipal/public works castings such as soil/rain water pipes and fittings, manhole covers, etc. Production facilities of company situated in Nagpur, Bhilai, and Anjora.
Syncom Formulations
Syncom Formulations is engaged in manufacturing and marketing of more than 300 pharmaceutical formulations products in various dosage forms like Tablets, Capsules, Liquids Orals, Liquid Vials and Ampoule Injections & Dry Vial injections, Dry Syrups, Ointments, Inhalers & Herbals.
Manufacturing unit of Syncom is located at Pithampur (30kms away from Indore, the commercial capital of Madhya Pradesh, India). Company operates in more than 15 countries worldwide having more than 400 products registered. The Division ‘Cratus Life Care’ of Syncom is involved in taking care of domestic market’s needs in India.
KM Sugar Mills
KM Sugar Mills is into the business of manufacturing of sugar and Distillery Products, unit is situated in Faizabad (U.P.). The Company has the sugar plant capacity of 9000TCD, Distillery Plant-45KLPD. KM Sugar Mills has a vast experience and a established name in the field of sugar export as well as in domestic trading of sugar. The company has experienced team for sugar procurement, logistic and for sale of sugar.
Rajoo Engineers
Established in 1986, Rajoo Engineers makes plastic-extrusion machines at its plant in Veraval (Shapar), in the district of Rajkot, Gujarat. The promoters of REL have three-decade experience in the plastic-extrusion industry. The company designs and manufactures machines and offers customised solutions as per customers’ requirement.
ASI Industries
ASI Industries (ASIL), formally Associates Stones Industries, is an Indian based stone mining company. ASIL is one of the oldest mining companies, started operations in 1945. Company holds a stone mining quarry spread across 10 sq kms at Ramganjmandi, Kota District, Rajasthan; the home of impeccable quality Kota Stone. The quarry produces over 12 million square meters of Kota Stone every year.
In 2014, ASIL acquired Al-Rawasi Rocks & Aggregate LLC. (of United Arab Emirates) that is a pioneers in the production and supply of a myriad range of high quality hard limestone rock products. Company generates most of its revenue from the Stone business.
MSP Steel & Power
MSP Steel & Power is a Kolkata based steel manufacturer. It is engaged in the manufacturing of Iron and Steel products. It is also engaged in the generation and sale of power. The company’s product offerings include Pellets, Sponge Iron, M.S. Billets, Coal Washery, TMT Bar, and Ferro Alloys. They market their TMT bars under the brand name of MSP Gold Theremax TMT. They are having their manufacturing unit at Raigarh in Chattisgarh.
Orient Green
Orient Green Power was incorporated in 2006 in Chennai, Tamil Nadu. It is a renewable energy-based power generation company focused on developing, owning and operating a diversified portfolio of renewable energy power plants. Their portfolio includes biomass, biogas, wind energy and small hydroelectric projects. The company has a power generation capacity of over 400 MW.
Piccadily Agro Industries
Piccadily Agro Industries was incorporated in the year 1994. Company’s principle activity is to manufacture sugar and their by-products. In sugar business, they are engaged in the production of sugar, molasses and bagasse. In other business, they are engaged in the production of liquor. Their plant is located at Bhadson in Haryana.
Reliance Power
Reliance Power or Rpower is a part of Anil Dhirubhai Ambani Group. Company has been established to develop, construct and operate power projects both in India as well as internationally. The company has close to 6000 MW of operational power generation assets. Reliance Power’s projects portfolio also includes 3,960 MW Sasan Ultra Mega Power Project (Madhya Pradesh). UMPPs are a significant part of the Indian Government’s initiative to collaborate with power generation companies to set up 4,000 MW projects to ease the country’s power deficit situation.
South Indian Bank
South Indian Bank is one of the oldest banks of South India. Bank was set up by a group of people to provide a safe and efficient repository of savings of the community and need based credit at reasonable rates to businesses of Thrissur (Kerala) area. As on 31st December 2020, the bank had a network of 877 branches and 1443 ATMs across the country.
Vodafone Idea
Vodafone Idea is a Aditya Birla Group and Vodafone Group partnership. The company provides pan India Voice and Data services across 2G, 3G and 4G platform. Company is the third largest wireless operator by subscribers in India.
Now, when we know about the businesses of mentioned Penny stocks, lets quickly look at some queries which might come to your mind before investing in Penny Stocks.
Are Penny Stocks Really Good for the Investment purpose?
Some Penny stocks tend to move for only a short period of time. When they have moved quite good in recent months, they could easily see a downward pressure from their highs. However, there could be some Good Penny shares which keeps moving higher in long term and eventually turns into a 3 digit stock in the future!
Considering these things, it would be a good decision to book some or half of your profits at higher levels whenever your Penny stock has seen a good rally. If your stock reversed and came down again, you will be able to protect your profits. In case, the Penny stock continued to climb and turns out to be a Real MULTIBAGGER, then you will still have half quantity of shares to enjoy the journey.
How Risky Penny Shares could be?
Penny shares are one of the riskiest category of stocks in the Stock Market. It is because they have a low price and any significant buying or selling can easily bring Big changes to them. Another reason which makes them risky is their businesses. Penny shares are trading in Penny prices because either their business size is small or they are going through tough financial conditions.
In past, there are examples of Penny stocks when the downfall was upto 60-90% within a few months! Additionally, many penny shares could be trading in circuits which generally makes the buying and selling process of shares little harder in them.
What kind of Returns should we expect from Penny Shares?
Along with High Risk, Penny stocks comes with huge potential too! If you entered in a Penny stock at the right time and kept the shares for the appropriate time, you can easily earn 50% to 300% returns from the stock. Depending upon the share, return could skyrocket upto 500% or higher!
Ideally, what amount should we allocate to the Penny Stocks?
It is always a good strategy if you allocate a limited amount to the Penny stocks. Depending upon the risk capacity of a particular investor, we shouldn’t invest more than 30% of our Total Capital in penny shares in any case.
When the Penny stocks are down and haven’t seen any good rally in recent time, high risk taking investors generally increase their exposure to them. When the shares are trading at higher levels and have already seen a good rally in recent months, it can be a good time to decrease some exposure in Penny stocks.
Shares that are available between 1 to 10 rupees
In recent months, whole category of Penny Stocks has seen a great rally. Many Good stocks which were trading below Rs 10 are no longer available at this price. But still, there are some good stocks trading below Rs 10. Here are the names of them.
- Jaiprakash Power
- Syncom Formulations
- Genus Paper & Boards
- Vodafone Idea
- South Indian Bank
Best Penny Stocks Available below Rs 20
Along with shares mentioned above, these are the stocks available below Rs 20 in India.
- Alankit Limited
- Reliance Power
- ASI Industries
- Dish TV
- Pritika Auto
If you want to know the names of more low price stocks, you can also check this article Best under 50 Stocks in India. In article, some good low price stocks have been mentioned that are available below Rs 50. However, these are not the Penny stocks. But as compared to Penny Stocks, these under 50 stocks have a lower risk.
Best Dividend Paying Penny Stocks
If Penny stocks are paying dividend of atleast 1% (dividend yield), then it might be a more better stock for investment purpose. But, the reality is there are hardly any Indian penny stocks generating 1 percent + dividend yield.
Alankit is one stock which you can look for dividend income. Otherwise, there is no other good option.
What kind of Investors can Buy Penny Shares?
Stocks are a volatile and risky assets. And penny stocks are more risky! If you have bought penny shares, you should always be ready to sustain 20-40% decline in Penny shares within a few days or weeks without any major news.
If you are ready to suffer this kind of volatility in search of higher returns in Indian Stocks, then Penny Shares are made for You! However, make sure that you wouldn’t hesitate to take a major loss if Penny stocks failed!
So, that is the end of this post. Hope it helps to pick some good penny stocks.
Good Luck : )
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Hi Sir,
The collection of Best Penny Stocks was nice. But, Penny Stocks are not just those stocks which are trading in Single Digits but also small companies in terms of Market capitalization. So, I think Idea can’t be called a Penny Stock. As its having mcap of over 29k crores.
Hi sumit,
You are right that Vodafone idea has a huge market capital. But there are few common characteristics of penny stocks in vodafone idea which prompted me to add it too in the list. They are
1) The price of share is around or below Rs 10.
2) Stock always has high volatility like penny stocks have.
3) Risk in stock is very high!
4) And lastly, whenever it starts moving, it always has potential to give penny stock like returns.
So, if we don’t look at its market capital, vodafone idea is purely a penny stock.
hi i thought i want to know this three penny stock 1.Reliance power 2. South indian bank 3. Piccadaily agro industry . can you suggest me is that ok to purchase
Recently, rpower and Piccadily have seen a good buying. So assume that they could easily see some decline from current prices. If you want to purchase them for long term bet, then it is ok to purchase them. No problem in Rpower, South Indian bank, Piccadilly Agro.
Investing in such stocks always carries risk of losing a major part or whole part of your invested capital. So, invest any amount accordingly in them.
useful information.
Glad you found the article useful🙂
Hello Sir Good Morning. Thanks for the informatons about the penny stocks. These shares can be bought and the holding period should be minimum period of two years and peroidical tracking is a must.
My pleasure to help you. Completely agree that these penny stocks would require periodical tracking and long term view. From time to time, Short term play can also be there in stocks if done carefully and wisely.
among this list my personal experience with ISMT is beyond imagination. currently giving me 150% profit. Liked this article, expecting more details like holding period… wud be helpful. thnx for this post.
After kirloskar group entry, balance sheet and business of ISMT is expected to see some significant improvement over long term. Depending upon that, 1-3 years can be a good holding period. However, if it is able to reach ₹100 or more in short term, then some profit booking can be considered.