Are you searching on the internet What is best penny stocks in India now to buy then this blog is for you Because Everyone has some savings and wants to invest their capital to get the best possible profit within the timeframe? But keeping the savings in the bank account or any other fixed deposit will provide 3%-5% gains within a year, which are equivalent to the inflation rate.
So, overall you will not get your money back, no gains and profit. Why not invest somewhere else which provides a massive profit i.e. Stock market? It is the place where you will get about 12%-30% of returns, depending upon the individual stock.
There are some big stocks in the Indian stock market that hold most assets of the investors and also give enough returns. These include Reliance, Adani, and TATA. But they take time to multiply your assets.
Also investing in these stocks you can try for those arenas of the market which will multiply your assets within less time. One of the most profitable stocks is penny stocks which will give you massive profit within a short period. Here in this article, we will tell you the basics of penny stocks along with the best penny stocks in India.
Table of Contents
What are penny stocks?
India has two major stock exchanges i.e. National stock exchange (NSE) and the Bombay stock exchange (BSE) that regulates all the trading and investment activities across the country. The stocks that are traded at minimal prices on these stock exchanges are known as penny stocks. The average price of these stocks is around INR 0-10 or extended to 20 or 30 rupees as well.
These stocks are available at very straightforward prices that will allow the investors to buy a significant quantity of the shares with minimal capital. The penny stocks can offer you the multi beggar returns within a short period. The minimal fluctuation of price can determine huge profit and loss.
Advantages & disadvantages of penny stocks?
Everything has two aspects i.e. positive and negative, same with the penny stocks they have both advantages and disadvantages as well. Along with pros, it comes with some cons as well, here are some of the most common advantages and disadvantages of penny stocks:
Advantages of penny stocks
Low market price
Penny stocks are available at a minimal price starting from INR 1 and can be extended from INR 10 to 30. Anyone can afford to buy penny stocks and invest their capital for attaining maximum profit. The only reason behind such a low price for shares is the low capitalization of the company’s market. Keep in mind that the price may not stay at a minimal range, sometimes it can extend to a greater range and become a multibagger stock.
High volatility
One of the biggest advantages of penny stocks is the high volatility, penny stocks are available at a low price which is why the big traders used to buy them in massive quantities. For example, if the price of the share of penny stock is around INR 1, then you can buy 100000 shares for just 1,00,000 Rs. These stocks will rise in an unexpected manner which is why if the price exceeds INR 1, it leads to a gigantic profit.
High returns
Newly established companies with a market capitalization value have penny stocks. And if these companies grow the stock will automatically reach a high level. For example, if you hold 10000 shares at Rs 1 and the price of each share reaches from Rs 1 to 3 then you get 300% profit directly. Sometimes the penny will offer 1000% profit within a short period.
Learning the basic investment
An investor needs minimal capital to hold the shares of penny stocks. If someone wants to learn the basic investment structures and techniques then they are the best way to learn practically from the actual market. Many big investment academies use this strategy to train their students.
Disadvantages of penny stocks
Prone to Scams
Penny stocks have low trading prices and market value that will invite scammers to manipulate the price of such stocks and scam unaware investors. There are some groups of investors who used to manipulate the penny stocks by investing massive capital and after they saw enough profit, they squared off their assets. This is illegal but it is difficult for the stock exchanges to identify such scams.
Limited information
Before investing in any stock, the investors used to calculate and analyze the financial soundness of the company. But it is difficult to do so with the penny stock companies because of the lack of such information. Also, one of the biggest strategies used by investors is to analyze the history of stocks before investing. But the penny stock companies are newly established and do not have a financial history.
Unpredictable pricing
This is one of the biggest disadvantages of penny stocks, they have unpredictable prices and can collapse at any time. If you are lucky your assets will grow up to 100-1000% overnight but sometimes all your assets may lose in less time. The market of penny stocks is extremely volatile and uncertain.
Low liquidity
The popularity of the company is determined by its brand value. Someone gives you an option to choose from two companies, one is, whose products you are using in your daily life and another is that, which is completely strange and never heard before. You definitely chose the first one. The same situation is with the penny stocks. The trading value is very locked and investors may lock their assets for a long time due to the availability of buying orders.
Tips for penny stocks investment
Being an investor is not easy at all, especially if you want to invest in penny stocks. They have fluctuated prices and are unpredictable. They display a sudden bullish moment and a bearish one on the other moment. There are some tips and techniques you need to follow if you want to invest in penny stocks. Some of these tips are mentioned below, let’s have a look:
Keep a long position
The biggest advantage of investing in stocks is that the loss is limited to your investment. But this can be a disadvantage in penny stocks. Keep in mind that do not square off your assets if you see loss, always hold the assets for a long time. A little fluctuation in the financial position of the company might give you 1000% returns.
Observe the volume
This is another tip to invest in penny stocks. All you need to do is just follow the volume and invest accordingly. If you buy penny stock with almost neglected volume it can lock your money for a long time. Might be in the timeframe the penny stock will show a bearish run and all your assets will touch the ground.
Analyze the stock first
Before investing make sure to study the stock and then place an order or buy the shares. First of all look toward any upcoming board meetings, company expansion, upcoming discounts, new services, and many more aspects. This will give you an idea of whether the company shares grow or not.
Never be greedy
Penny stocks come with predicted profits and losses as well. If you book enough profit of about 30-100% they square off your assets safely. If you exhibit greed, there might be a huge loss within a short period.
Pick your own
One of the biggest scams in the stock markets is toxic advice and recommendations. There are investing mafia who used to manipulate the penny stocks as per their profit and for the same, they spread fake news and capture new investors.
How to find the best penny stocks?
Finding the best penny stocks is a major challenge. There are thousands of companies that register for the stock exchanges every year. This makes it difficult for you to choose the best one for investing in. Well, you can look at the financial history of different companies and market volume as your prime priority. After confirming these factors you can look at the major upcoming events and activities of the company.
Keep in mind never to listen to the telegram channels and Youtubers, their advice may get you into trouble and you will face a massive loss.
List of best penny stocks in India Now
Some of the best penny stocks in India are listed below, let’s have a look:
Kothari sugar sand Chemical Limited
Kothari sugar is a flagship company established in the year 1961 by HC Kothari Group in the Kattur village of Trichy District. Now it has grown to its extent and established two major sugar mills in Tamil Nadu and Sathamangalam village. It has a market capitalization of around 338.18 cr and the last price is around INR 41.00. If we see the current market requirements, the stock of this company may become another multibagger stock. It is one of the oldest and most trusted sugar industries with government-approved dissertations and authorizations.
Man Infraconstruction limited
This is an infra-construction company that executes massive projects across the country till 2002, there is no need to worry about fraud and scams, this company has all government approvals. The infrastructure covered by the company includes port development, commercial area, residential area, and big projects. The market capitalization is around 3.58TCr and the latest price is around INR 96.40
Add shop e retail limited
This company is one of the leading industries dealing with the manufacturing of health care, ayurvedic and beauty products. As per the needs of emerging healthcare sectors, investing your savings in this stock will be a great deal. In the upcoming years, this stock seems to have a massive bullish moment. Since its establishment date in 2015, it has contributed to the agro commodities of India. The Market capital of this stock is 306.95 Cr and Kate’s price is around INR 74.40
Vodafone idea limited
Vodafone and Idea were the two major telecommunication companies in the world including India. Recently both of them collaborated and formed a single unit also recognized as Vi or Vodafone idea limited. Since 31 August 2018, the company has achieved major milestones and provided super-fast 4G internet and communication to the Indians. In the upcoming years, the company will grow because of the increasing demand for internet users.
The Marker capital of Vodafone idea limited is around 38.90Tcr and the latest piece is around 30.90Tcr.
Suzlon energy limited
Suzlon is an Indian-based wind turbine manufacturing company that manufactures wind turbines for wind energy plants. As global warming is striking across the globe and becoming a major reason for climate change. The world is looking towards economically friendly sources of energy like wind and solar energy. That is the only reason why investing in this stock can be a great idea. It has a market capitalization of around Rs 8,420 Cr and INR 8.60 latest price.
Conclusion
Penny stocks can be life-changing for your trading journey as they can give your ultimate gains or losses. Make sure to adopt a reasonable strategy and implement it favorably to get what you’re looking for.
Note: One thing Rember before investing in penny stocks these stocks are highly risker. so before investing in these stocks please consult your financial advisor and do your proper research before investing