Share market is one such arena where you can earn substantial returns over your investments. Investing in stocks with a proper strategy can help you to maximize returns and reach financial goals. The market offers a number of ways to earn money. There are numerous stocks available on the stock market that investors can buy. One such category of stocks is penny stocks.
Penny stocks, as the name suggests are stocks with very low prices. The prices of these stocks can be lower than Rs 10 and you can also buy penny stocks India below 1 rupee. Although considered as highly volatile and risky, penny stocks offer a great opportunity to earn substantially higher returns in both the short and long run. In this article, we will learn all those reasons why you should invest in penny stocks in India below 1 rupee.
Penny stocks give you one of the best opportunities to earn substantial returns
Reasons to Invest in penny stocks India below 1 Rupee
There are several reasons why you should invest in penny stocks India below 1 rupee. Let us know the top reasons in brief.
Low Investment Required
How many penny stocks India below 1 Rupee can you buy? Well, you can have over 1000 units of such stocks in less than Rs 1,000. Thereby, even with Rs 5,000, you can own atleast 5 such penny stocks India below 1 Rupee. Even if one out of the five stocks turns out to be a multibagger, your entire investment will be worth it. For example, suppose you have invested in Rs 1,000 in five to buy 1000 units of five different penny stocks. Now one of the stocks performs exceptionally and its price shoots up to Rs 10. Now, with that single stock, you would have earned Rs 9,000 by investing Rs 1,000 only. This means even if the other four stocks fail, your return from the investment would be atleast 80 percent.
High Growth Potential
Penny stocks are traded at very low prices. If you buy penny stocks India below 1 Rupee, there are chances that the stock can turn out to be multi-bagger. The stock market history is filled with a number of penny stocks turning out to be exceptional performers and offering substantial returns to the investors. This is the reason why many investors, apart from making a solid and stable equity portfolio, also invest in penny stocks to capitalize on their high return offering potential.
Less Capital Loss
If you are looking to invest in penny stocks in India below 1 Rupee, you should invest low. For example, you can invest Rs 2,000 in two or three such penny stocks. Even if the value of all the penny stocks in which you have invested turns to zero, you won’t be losing much capital at the end of the day. For example, if you are buying 1000 units of a penny stock whose price is Rs 80 paise, you are investing only Rs 800. Now say, the price falls by 50% the very next day, you will suffer a loss of only Rs 400.
Companies With High Growth Potential
Investing in penny stocks in India below 1 Rupee means investing in companies with very low market capitalization. Most such companies are usually startups that possess very high growth potential in the future. With proper research and fundamental analysis of these penny stocks, you can pick the ones that have very high chances of becoming successful in the near future. This reduces the risk associated with penny stocks investment and increases the chances of earning higher returns from very low investments.
Better than Other Risk Bearing Investment Options
Penny stocks are risky investments, no doubt! However, they are still worth more than many other high-risk investment instruments like options trading, intraday trading with high margins, betting on fraudulent crypto assets, etc. Investing in penny stocks allows you to hold your investments for as long as you want. This feature is absent in intraday and option chain trading. Even if you see that a penny stock in your portfolio is performing very poorly, you can hold the same for the future and see whether it turns out to be profitable or not.
Short Term Volatility
The high volatility of penny stocks can be leveraged by a trader in his favor. There are many penny stocks that frequently hit their upper or lower circuits in day trading sessions. An investor can buy these stocks when they are trading at a very low price and wait for the same to hit the upper circuit. The same can be done vice versa. A trader can sell the penny stock when it is trading a higher price and then wait for the same to hit the lower circuit, also known as short selling.
Number of Available Options
There are a number of penny stocks available in the stock market. You can choose the best penny stock in India below 1 Rupee to increase your chances of earning higher returns. The availability of options gives investors the opportunity to compare, scan and pick the best penny stocks that have higher chances of becoming successful than others. For this, you can use a stock screener to pick high-quality penny stocks easily. You can create a custom filter with a price below 1 Rupee, high trade volume, company’s fundamentals, etc., and scan a number of penny stocks within a few seconds. From the list, you can choose a few stocks that have higher success rates than other penny stocks.
Top Penny Stocks You Can Buy Under Re 1
| Penny Stock | Price (Rs) |
| Shalimar Productions Ltd | 0.49 |
| MFL India Ltd | 0.81 |
| Gold Line International Finvest Ltd | 0.34 |
| Antarctica Ltd | 1 |
| Maharashtra Corp Ltd | 0.78 |
| Devhari Exports (India) Ltd | 0.82 |
| Khoobsurat Ltd | 0.33 |
| Cox & Kings Financial Service Ltd | 0.35 |
| Hit Kit Global Solutions Ltd | 0.66 |
| CES Ltd | 0.3 |
(Date as of December 21, 2022)
You can use a stock screener to scan and find high-quality penny stocks
So we have learned the benefits of investing in penny stocks. However, we also know the risks associated with investing in such stocks. Thereby, it is better to do extensive research that should include analyzing different stocks, learning about the company and its performance, knowing the company’s business operation, and a lot more. If you do proper research and invest cautiously in penny stocks, there are more chances of getting higher returns. Also, do not put a bet on a single penny stock, instead, pick at least 4-to 5 such stocks to contain risks. The list given above can help you to choose the best penny stocks in India below 1 Rupee.
