Best Penny Stocks in India

Penny Stocks in India – Multibagger Penny Stocks to Buy Now

Penny Stocks in India usually attract Many new investors in share market. They Invest Some amount of money in this stock and wait for Higher returns.

But the end they lose their all money with the time.

Dream of becoming rich for individual investors never come true.

Then the question arises if penny stocks are that bad then why anyone is investing in them?

The answer of your question is explained in details Is below section.

Why they are listed on the Stock market?

Bajaj Finance (up 13,131 per cent), Safari Industries (up 8625 per cent), Bharat Rasayan (up 8,337 per cent), Astral Poly Technik (up 8,005 per cent), Arman Financial Services (up 7,090 per cent), Relaxo Footwears (up 6285 per cent), Symphony (up 6185 per cent), Ajanta Pharma (up 6004 per cent), Fairchem Specialty (up 5,148 per cent) and Tasty Bite (up 4897 per cent) are the 12 Multi beggar stocks in last decades who have given a tremendous return to their investors.

Everyone looking for This type of stocks who can be multi-beggar in future. They want to invest their money in this stock.

Many people ask me which are the Best Penny Stocks in India to buy today. So today we are going to discuss about some of the best Penny stocks in India.

But before sharing any list lets understand which type of shares are known as Penny stocks.

What are Penny Stocks?

Stocks with low price is known as Penny stocks. Usually the stocks with less than 50Rs are called as penny stocks. 

This type of company is classified as a Low Cap company with very low market Capitalization. They are not actively traded on stocks exchanges.

 nano-cap stocks, micro-cap stocks, and small-cap stocks are some name which are used by Investors for penny stocks. The market capitalization of any shares is calculated on the bases of two things.

  • Current Price of Stock
  • Number of shares

By Multiplying these two things we can calculate the market capitalization of any share. As the price of a share is low, penny stock always has a low market cap.

Basically, we can classify any company on the bases of their market capitalization. Below is the table which shows how companies are classified:

Large-cap CompaniesMid-cap CompaniesSmall-cap Companies
Market capitalization of Rs. 20,000 Crore or aboveMarket capitalization of Rs. 5,000 Crore – 20,000 CroreMarket capitalization Below Rs. 5,000 Crore

Why Investment in Penny Stocks is a Good Idea?

Usually, I don’t like to invest in penny stocks. Also, I never recommend anyone to invest in penny stocks.

Company with Bad Financial statement, Balance sheet have low price issue in the stock market. Any investor never wants to invest in a company with lots of debt and week balance sheet.

But there are some shares in the market which I think have a lower price as compare to their value. Either these companies have Temporary problem or they have not gathered any market focus on their business till now.

So, if we choose the right multi-beggar share then with the time we can get a good amount of return.

Below are the some Advantages of buying penny stocks:

  • Lower Price/Cheap price:

The best part of Penny stocks is you can invest a low amount of money and get a great number of shares in very less money. Companies who are categorized are mid-cap or large-cap companies have High prices as compare to penny stocks.

If you invest a small amount of money in Penny stocks and things are not under favor then you will lose a small amount of money. And if everything goes right, then you can become multi-millionaire in a long period.

The problem with mid-cap and large-cap is they are costly. You have to buy a Significant number of shares to get actual benefits of growth. That’s means you have to invest a large amount of money. But if anything goes wrong and the price of stock started falling then you will lose a large amount of money as compare to Penny stocks.

  • Multibagger:

Mr Rakesh Jhunjhunwala is a famous Indian investor who started investing in Titan Stock when the stock was at 3 Rupee. With the time stock become multi-beggar. Current Price of Titan is 1200 Rupee. 

The growth of such Stocks is more than X10000. If you buy Penny shares and with the time if they become multi-beggar then you can see Exponential growth of your investment in your portfolio.

How to Choose Multibagger Penny Stocks?

If you really want to make real money, then you should be very careful while selecting penny stocks. The problem with penny stocks Is they not actively trade on the Stock market. So, if anyone buys or sell stock we can see Upper circuit or lower circuit limit in penny stocks.

A company which can become multi-beggar in future have some common behavior. You can check and try to understand company business, if you think the stock has the following nature then you can consider them for a buy.

  • Balance sheet: Before investing in any company you should check the balance sheet of that company. A balance sheet shows the Profit, Loss and past performance of the company. If the company is making a huge loss in every quatre than you should avoid them for a buy. You can Search the Balance sheet of any company on Moneycontrol website.
  • Market Leader: If the company is the market leader of the sector then you should always go for buy for long term. The problem may be temporary with that sector. Whenever the following sector starts growing, your company will start making sales and the price of a penny stock will also go up. For example: Currently, the Auto sector is not performing good. That’s why many Market leader Like Ashok Leyland are become as penny. But whenever the Auto sector starts emerging again, the market leader Ashok Leyland will make huge sales and stock will be stock rocket at that time.
  • Profit growth: You should also check the profit which the company is making. Is there any profit or loss? This will help you to understand the future growth of the company.
  • Debt and pledge shares: The problem with many penny shares is they have lots of debt. In many cases, they have a high number of pledge shares. This shows there is a problem with the company. You should avoid companies having a high number of debts.
  • Management and staff of Company: the company will grow or not is depend upon the management of the company. If the management of a company is not good then the company will never grow. You should always check their past history.
  • Free CashFlow: you should check how much free cash company is now having. If they need any money in any situation or if they want to invest money in their business then the company have enough free cash to invest or they have to take a loan. Free cash flow also helps companies to sustain when the company is not booking any profit.

Penny Stocks In India

Here we are going to find Top 10 Stock Description which I think can Become Multi Bagger in Future. This stocks are undervalued if you check their states, Earning, PE and PB ratios as compared to other stocks in same sector.

Share NameCurrent PriceVolumne Market CapitalizationP/EEarning Per ShareSector
DHANBANKDHANLAXMI BANK LTD13.8531.506K3.56B5.412.6Finance
BINDALAGROOSWAL GREENTECH LIMITED12.383013.141B5.542.24Finance
PDMJEPAPERPUDUMJEE PAPER PRO15.0559.818K1.476B5.412.87Process Industries
SYNCOMFSYNCOM FORMULATIONS (INDIA) LT1.857.727M1.382B9.960.18Health Technology
PASUPTACPASUPATI ACRYLON LTD.11.347.654K1.034B5.652.03Process Industries
AMJLANDAMJ LAND HOLDINGS19.954.748K832.3M8.412.39Process Industries
SURATEXSURAT TEXTILE MILLS LTD.3.25722.209K688.4M4.390.71Process Industries
VIVIDINDVIVID GLOBAL INDUSTRIES LTD.16.171.627K146.062M8.771.82Process Industries
3PLAND3P LAND HOLDINGS L6.4544078.84M3.152.05Finance
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Before sharing any Stock name Let me clarify, this is my personal opinion. I am not giving you any Advice to buy this stock. Always do your own research or consult with your financial advisor before investing in any company.

#1. Dhanlaxmi Bank Ltd

 The first share in the list is from the Finance sector. Yes, the stock belongs to the banking sector. Dhanlaxmi Bank is one of the famous Indian Bank which has the Market capitalization of 3.56 Billion.

Currently, the stock is undervalued when you compare this stock with other shares in the same sector. The PE ratio of Dhanlaxmi Bank is Just 5.30 whereas other stocks from the same sector have an average PE ratio of 21.76. that’s mean Stock is very Cheap as compared to other stock in the same industry. The PB ratio of Dhanlaxmi Bank is just 0.45 whereas the average PB ratio of other banks is 1.77.  Company is Profitable when you see the Balance sheet of the company but the only problem with DhanLaxmi bank is they are not able to grow their profits.

  • Stock Name: DHANBANK
  • Market capitalization: 3.56 Billion
  • PE Ratio: 5.3 (Sector Average is 21.76)
  • PR Ratio: 0.45 (Sector Average is 0.45)
  • Company Is Profitable: Yes

#2. Oswal Greentech Ltd

My Second Penny stock is Oswal Greentech Ltd. The company belongs to Real state Sector. Company is Profitable and made 117.16 Crore in last Quarter. The Current Price of Oswal Greentech Ltd is just 13 Rs. Where stock is at an all-time high of 102 Rupees in 2011. 

I think the stock price of the company is very less as compare to other stocks in the same industry. The Oswal Greentech Ltd is 5 Time undervalued as compared to other shares of the real state sector. The PE Ratio of the company is just 4.38 whereas the average PR Ratio of other company is 26.53.

  • Stock Name: BINDALAGRO
  • Market capitalization: 3.141 Billion
  • PE Ratio: 4.38 (Sector Average is 26.53)
  • PR Ratio: 0.13 (Sector Average is 1.37)
  • Company Is Profitable: Yes

#3. Pudumjee Paper Products Ltd

Pudumjee Paper Products Ltd is a company who make products which are made of Paper. Company’s products are Eco friendly. The best part about the company is they are profitable and growing their revenue every quarter. In the last quarter, the company is able to make 609.69 crores.

The current PE ratio of a stock is 5.24 which is very less as compared to the average PR ratio of other Stocks in the same sector. Currently, the company has a market capitalization of 1.476 Billion. 

  • Stock Name: PDMJEPAPER
  • Market capitalization: 1.476 Billion
  • PE Ratio: 5.24 (Sector Average is 18.83)
  • PR Ratio: 0.55 (Sector Average is 1.76)
  • Company Is Profitable: Yes

#4. Syncom Healthcare Ltd

Another share which I want to share with you is from the health sector. The current price of Syncom Healthcare Ltd is 1.87 Rupee. The PE ratio and PR ratio of this share are in negative. The company is making profit every year but the biggest problem is company is not able to number of profits are going down with time.

You can see the company’s PR Ratio is -0.88 and PB Ratio is -11.33. which is very less as compared to average Market Ratio 33.85 and 3.56 Receptively.

  • Stock Name: SYNCOM
  • Market capitalization: 1.382 Billion
  • PE Ratio: -0.88 (Sector Average is 33.85)
  • PR Ratio: -11.33 (Sector Average is 3.56)
  • Company Is Profitable: Yes

#5. Pasupati Acrylon Ltd

Next share which I am going to share with you is belongs to Process Industries. Company is Microcap. The overall market capitalization of the company is less than 1.034 Billion rupees.

The problem with the company is they are not able to grow a number of profits which they are making. In Dec- 2019 Company shared its 3rd Quarter result where we can see the company is able to make a profit of 143.32 Crore.

  • Stock Name: PASUPTAC
  • Market capitalization: 1.034 Billion
  • PE Ratio: 5.04 (Sector Average is N.A)
  • PR Ratio: 0.49 (Sector Average is N.A)
  • Company Is Profitable: Yes

#6. AMJ Land Holdings Ltd

One of my favourite penny stocks in India is AMJ Land Holdings Ltd. Company is profitable but the same problem we can see in this company also. Company is not able to grow their profit number. In the March quarter company shared their balance sheet where we founded company is able to make 7.01 Crore of profit.

I know profit is very low. But when you compare this share with other shares from the same industry you will find the PE ratio and PB ratio of the company is very less. Company is undervalued as compared to other shares in the industry.

  • Stock Name: AMJLAND
  • Market capitalization: 832.3 Million
  • PE Ratio: 8.15 (Sector Average is 26.12)
  • PR Ratio: 0.79 (Sector Average is 1.34)
  • Company Is Profitable: Yes

#7. Surat Textile Mills Ltd

Surat textile Mills is incorporated in 1945. This company Belongs to Process industry. But in recent time we can see the profit of the company is decreasing.

If you are looking for a long time and you can enter the company at the right time then this can be a golden jackpot share for you.

  • Stock Name: SURATEX
  • Market capitalization: 688.4 Million
  • PE Ratio: 4.25 (Sector Average is N.A)
  • PR Ratio: 0.54 (Sector Average is N.A)
  • Company Is Profitable: Yes

#8. Vivid Global Industries Ltd

Most of the company which belongs to the process industry are undervalued. One of the undervalued company which I think can become multi-bagger in future is Vivid Global Industries Ltd.

Company is struggling in making profit. I think you can add this share in your watchlist and check-in future if the company can grow its profit result.

  • Stock Name: VIVIDIND
  • Market capitalization: 146.062 Million
  • PE Ratio: 9.78 (Sector Average is N.A)
  • PR Ratio: 1.07 (Sector Average is N.A)
  • Company Is Profitable: Yes

#9. 3P Land Holdings Ltd

3P Land Holdings Ltd is one of the best Penny shares form this list which I shared here. You can buy 3P Land Holdings Ltd shares if you are looking to invest in the company for a long time.

Company is making a profit and it is listed on the stock market for more than 13 years. The company has increased its profit in the last financial result as compare to last year.

  • Stock Name: 3PLAND
  • Market capitalization: 78.84 Million
  • PE Ratio: 3.29 (Sector Average is 26.12)
  • PR Ratio: 0.38 (Sector Average is 1.34)
  • Company Is Profitable: Yes

So, this are the shares  in which I think you can invest if you are looking for a long time investment. Long time investment means investment for more than 5 to 7 years. Make sure you keep your stop loss ready when you bought any penny shares.

How to Invest in penny stocks?

For buying any type of stock you need Demat account. You can open your Demat account with any broker.

Following are some Best broker in the market. I will suggest you open your account with these brokers.

After opening your account, you can easily buy any shares. The process of buying shares and selling is giving in following Demat review post.

Conclusion

I have shared the best penny stocks in India. As I already said, personally I don’t like to invest my money in penny stocks. But identifying multibagger shares help me to book huge profit in past.

You can also do your own research for shares. If you think the company is undervalued and the price will go high in future then invest some money in penny stocks.

Never invest your whole money in this penny stocks. Try to invest only a small portion of money in penny stocks.

If you have any question regarding penny stocks in India or do you think any stock I missed, then make sure you comment your suggestions in the comment box.

Share the list of penny stocks with your family and friends which they can buy now. Help them to earn some money.

Cheers!!

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