Top #10 Multibagger Penny Stocks below 1 Rupee in India:

Introduction

In this blog, we are going to be analyzing the pros and cons associated with investing in penny stocks in India and whether or not they should be part of your portfolio.

Relationship between risk and returns

With investing, there are always bigger risks present when there is a better likelihood of achieving greater returns.

One can conclude that:

  • Higher the risk, the higher the possible returns
  • Lower the risk, lower the possible returns

This is a helpful maxim to become familiar with before making stock market investments.

Possibility of enormous returns

Even though there is a substantial risk associated with investing in shares below Rs. 1, these stocks may have the ability to provide enormous rewards for you. Before investing one should keep some things in mind.

  • Doing the fundamental and technical research beforehand
  • Exercising reasonable caution

Don't Forget to Check: Penny Stocks Share Prices between Rs 1 to Rs 10

Let’s explore the intriguing idea of penny stocks in India that are priced below one rupee.

What are Penny Stocks?

These are the investments that need very little funding but extensive investigation. These stocks are referred to be multi-bagger stocks when they provide you with outstanding profits.

Penny stocks are really easy to identify. A stock can be classified as a penny stock if:

Shares that are traded on the stock market at extremely low or sharp prices, typically between 0 to 30 rupees.

Strong development and return rates that are amazing 

A significant degree of risk owing to volatility in stock prices.

Top #10 Multibagger Penny Stocks below 1 Rupee in India

Here is the list of Top 10 Best Multibagger Penny Stocks below 1 Rupee in India

  1. The closing price of stocks is up to Re 1
  2. Profit-making companies
1Shalimar Productions LtdSHALPRO90.550.930.07
2Sword-Edge Commercials LtdSWORDEDGE16.290.730.32
4Sikozy Realtors LtdSIKOZY4.0570530.953.47E-17
5Ramchandra Leasing and Finance LtdRLFL3.4278540.670.02
6CES LtdCESL1.34680.3725.66
7Varun Mercantile LtdVARUNME0.189240.990.05
8Nirbhay Colours India LtdPARTIND10.07
9Sagar Soya Products LtdSAGRSOY-B0.610.21
10CESCES.0440.44
Source: www.google.com

Stocks that trade on the stock market for less than one rupee are referred to as ultra penny stocks. This is among the primary factors that make these equities appealing to investors.

Also Like: Rakesh Jhunjhunwala Latest Portfolio

Benefits and risks of having ultra penny stocks in your portfolio

Shares priced below one rupee have the best chance of making significant profits thanks to their “cheap” pricing. Some might potentially become multi-baggers quickly due to this. These stocks are owned by businesses with extremely small market capitalizations.

Benefits of having ultra penny stocks in the portfolio

  • High returns

Since they are micro-cap firms, they have a lot of growth potential to close the gap with large-cap corporations. If their foundation is solid and their business climate is appropriate. This implies that you might earn several times your initial investment. Therefore, investing in such shares might significantly increase your chances of earning a profit.

  • Lower cost

These stocks are incredibly inexpensive and cost-effective as they trade below Rs. 1. You have the chance to purchase a sizeable number of penny stocks for under one rupee, from which you might profit if the price rises strongly.

Risks associated with having ultra penny stocks in the portfolio

  • Instability in pricing

However, keep in mind that Indian penny stocks priced below one rupee are typically unstable and volatile. Due to their low liquidity, they are very dangerous investments. Normally, throughout the trading session, penny stocks in India with a price below Rs. 1 do not experience significant price variations. They are much more probable to swiftly hit their upper or lower circuits, and unless one sells a really large number, the financial gains are typically negligible.

Must Read: Best Penny Stocks to buy in India for 2022

  • Illiquidity

Due to issuing companies being often unpopular, penny stocks in India priced below one rupee are usually illiquid. This lack of liquidity may be particularly problematic if a seller wanted to liquidate their position. It’s challenging to find a buyer willing to pay the asking price. Investors that have a very high tolerance for risk frequently think about investing in ultra penny stocks.

  • Lack of Information

Stocks below 1 Rupee are typically linked to undesirable or little-known businesses. There are several reasons why they suffer from a lack of information:

  1. It is exceedingly challenging to obtain information about these organizations for estimating the valuation 
  2. Many of these companies do not feel obligated to provide financial or corporate governance data to the general public.
  3. Due to the lack of transparency on part of these companies, there aren’t many investors out there with enthusiasm about investing in them.
  4. The lack of brokerages and research businesses that cover these microcap companies contributes to the lack of information.

MUST Read: Best Stocks to buy below RS 10 in India 2022

Conclusion

Multibagger Stocks below 1 Rupee in India have the possibility to become multi-baggers and provide you with enormous gains, but they are also very dangerous investments. Investors should be aware of such stocks since they are issued by businesses with modest market capitalizations and frequently fall victim to manipulating the price and pump-and-dump tactics. Before purchasing shares priced below one rupee, speak with your financial advisor.

Author

Prashant Raut is a successful professional stock market trader. He is an expert in understanding and analyzing technical charts. With his 8 years of experience and expertise, he delivers webinars on stock market concepts. He also bags the ‘Golden Book of World Record’ for having the highest number of people attending his webinar on share trading.