Best Low Price Shares to buy in India: A Detailed Analysis

cheapest share in india
Share

Best low price shares to buy today : Introduction

The ultra-penny stocks are extremely low-priced stocks that are traded on the stock exchanges at an extremely low price. While most of these stocks are not known by a larger group of investors because there is not much information available about the companies, their business strategies, and the organization’s fundamentals.

Even if you are able to access some kind of information on these companies a lot of times, they are unreliable. Nevertheless, if traded carefully these ultra-penny stocks that have a maximum trade value of Rs. 10 can sometimes outperform and are able to provide the investors with multi-bagger returns within a specified trading session.

Most of these stocks are illiquid in nature therefore just placing a few orders can sometimes overpower the circuit limit of the stock exchange. After continuously hitting the circuit for a specified number of days these ultra-penny stocks will be able to provide the investors with higher returns.

Best Low Price Shares to Buy in 2022 : Key Characteristics 

  • Low trading volume
  • Speculative nature
  • Small market capitalization
  • High-risk factor
  • Smaller company
  • Low price
  • Unpredictable performance
  • Volatile price swings

Low Price Shares List 2022 : Why are the Prices of These Stocks so Low?

The trading prices of ultra-penny stocks are very much lower because most of the investors do not participate or invest in them. Moreover, if an investor has already received a handsome return on investment after investing in these stocks, they try to exit from them as soon as possible. 

Some of these stocks are not transparent enough and sometimes do not comply with the exchange regulations. In case of a specific event or news, these ultra-penny stocks make their move.

Due to speculations, the trading volume of these stocks increases significantly and the prices of the stocks also reach new heights. Nevertheless, very few of these ultra-penny stocks are genuine in nature and fundamentally robust. Any kind of pessimistic news can heavily decrease the trading price of these stocks.

Best Low Price Shares to Buy in 2022 : How to Differentiate and Find out the Best Ultra-Penny Stocks?

Conduct your own research to invest in cheapest shares in india

The penny stocks companies are usually very small and as a result, they are also not well known among investors despite the fact that these companies are listed on stock exchanges. Before you decide to invest in penny stocks you need to understand the company, its products, and most importantly what you are investing into. Don’t buy the shares of a company that has a weak foundation or is nearing bankruptcy.

Limit your investments in cheapest stocks in India

Even though the prices of these stocks are extremely low, don't be lured into buying lots of shares. The ultra-penny stocks randomly go through extreme fluctuations; that is why you should limit yourself by investing in two to three company shares to actively keep track of them.  

Low Price Shares list (2022) : Prefer short-term investments

While you invest in ultra-penny stocks, consider it as a short-term investment and act accordingly. These stocks are simply unpredictable; therefore, you should opt for a short-term investment strategy. Due to its unpredictable nature, you may gain lots of money today but at the same time, you can also lose much more the very next day. Nevertheless, we will have to understand the fact that earning revenue from the stock market is not so simple.

Do not follow the crowd

Penny stocks always encompass rumors and that is the reason why the trading price of the shares fluctuates so rapidly. A lot of traders prefer the pump and dump strategy when it comes to penny stocks. 

In this strategy, rumors are spread about specific stocks and the investors purchase those stocks in bulk in order to show that it has a high demand. After watching the sudden rise in demand, the public starts investing in these stocks but their investment is not based upon any financial strategy rather all of it is a fluke.

Once the stock prices have reached a certain limit the traders sell all of their stocks and the share price is very much affected due to the same reason. The general public loses their money when the share price reduces drastically. Ultra-penny stocks are high-risk stocks and that is why they may not go along with the investment strategies of other investors.

Understanding the Ultra-Penny Stocks in India

The ultra-penny stocks in India are traded at stock exchanges at a very low price and volume. The minimum price of an ultra-penny stock in India is Rs. 0.01. Both the National Stock Exchange and Bombay Stock Exchange support the trading of penny stocks in India. Due to its extremely low price, a lot of new traders try their hands at penny stocks trading. It is also popular among small but seasoned investors because of its potential to provide huge returns on investment.

The range of penny stock gains can be 300 percent to 500 percent or sometimes even higher. For example, if you invest Rs. 100, you may get Rs. 500 in return as a profit from the investment you made. The usual market capitalization of penny stock companies in India is less than Rs. 10 crores.

Exclusive Features of Ultra-Penny Stocks

All the features of penny stocks are mentioned below:

Extremely low-cost

The ultra-penny stocks available in India’s stock exchanges are lower than Rs. 10. Therefore, if you spend a small amount you will be able to purchase a substantial amount of penny stocks.

High returns

In comparison to the other form of securities available in the market, penny stocks provide relatively higher returns on investment. The shares issued by micro or small companies have the immeasurable potential for growth but they are also risky at the same time because they can give out intense responses during the event of market fluctuation,

Unpredictable share price

During the time of sale penny stock may not reach the adequate price limit. Sometimes the profit margin can even become lower or nonexistent. At the same time, the prices of the penny stocks can also increase significantly and may end up giving you an enormous profit margin.

Illiquid in nature

Ultra-penny stocks are absolutely illiquid in nature due to the fact that the companies issuing the shares are proportionately unpopular. It is extremely challenging to find investors who are willing to invest their money in these company stocks. During emergency situations, these companies find it hard to sustain themselves.

Reasons for Investing in Ultra-Penny Stocks

The companies that issue penny shares can go through a tremendous growth period and eventually become large organizations or it is also possible for them to incur a massive loss. Nevertheless, as an investor, you should include penny stocks in your portfolio even as a short-term investment. Let us look at the reasons why we should invest in ultra-penny shares:

Extremely affordable

Penny stocks are the cheapest shares to buy. Henceforth, you can easily invest in them without spending a significant portion of your total investment fund. You can easily allot a small portion of your investment fund in order to purchase the best stock below Rs. 10 in India. You will be able to utilize the rest of the funds in more secure investment options and reduce the risk factors of your current investment.

Multi-bagger

Among all the cheap stocks available in the market some of these shares have the potential to turn into multi-bagger, which means that the stock prices can turn into multiples of the initial investment amount. In case a specific share becomes double the investment amount it is considered a double-bagger.

Similarly, if the share price becomes ten times the primary investment value, then the stock will be regarded as a ten-bagger. As an investor, if you include these cheapest shares in India then you may become successful in enhancing your overall profit margin. However, you will need to conduct a thorough investigation into the low-price share list 2022 before selecting the cheap stocks that have the potential to become multi-baggers.

List of Low price companies you can invest in 2022

NameSubsectorMarket Cap (Cr.)Close Price (Rs.)PE Ratio (%)1 Year return (%)
Raj Rayon Industries LtdTextilesRs. 611.9211.100.0043071.43
Prashant India LtdTextilesRs. 3.798.95NA572.93
Simplex Papers LtdPaper ProductsRs. 9.2330.75NA181.59
Natura Hue Chem LtdPortsRs. 1.874.35NA288.39
Titan Intech LtdSoftware ServicesRs. 4.1616.004.28259.55
Modella Woollens LtdTextilesRs. 7.0084.1022.85640.97
Shivansh Finserve LtdInvestment Banking & BrokerageRs. 2.654.4631.86193.42
Indo Cotspin LtdTextilesRs. 7.0117.2527.3871.81

(Price date as per August 10, 2022)

Disclaimer: The securities quoted are exemplary and not recommendatory. Past performance is not indicative of future returns

Important things to remember:

1. Do Not Blindly Follow Hot Tips

No matter how credible the source is, never follow a stock marketing tip blindly without conducting thorough research personally. Always select the stocks after doing proper research and analysis on the performance as well as the companies. While some tips can work out to give you huge benefits, the wrong ones can push you down under the risk pretty quickly. 

2. Eliminate Loser Stocks from Portfolio 

There is absolutely no guarantee that a stock will rise after a great fall. Know that it is extremely important to be practical about what is possible and what's impossible in the stock market. So, upon realizing that a stock is performing poorly in your portfolio, accept your mistake and sell it immediately to prevent further losses. 

3. Don't Exceed Your Investment Budget Abruptly 

While it's true that long-term investments are way better than other forms of investment, you shouldn't exceed your investment budget in a haste. Instead, decide on a fixed amount and invest it across various good stocks. Rather than investing in only one stock, divide your budget evenly across multiple good-performing stocks and shares. 

  • Can an investor purchase 10 Rs in share?

  • Can I buy only 1 share?

  • How can beginners buy stocks?

Share: