Best Stocks Under Rs 10 in India

Investing in the stock market is a gateway to numerous growth opportunities. For those often searching for penny stocks to buy, or best stocks under 10, there's good news. The market is teeming with instruments that, when strategized correctly, can provide significant returns.

While experts usually recommend a long-term approach, focusing on quality stocks to build a robust portfolio, some sectors promise, rapid growth. One of these high-potential areas is stocks under 10 rs.

In this guide, we'll dive deep into penny stocks in India: understanding what they are and highlighting the best stocks under 10 rs to buy in India.

Let's have a look at the best penny stocks to buy that have the potential to become multi-bagger penny stocks for India.

List of Best Stocks Under Rs 10 in India

Important things to note for the  Stock List under Rs 10 Data:

• 52-week high prices of the stocks are mentioned to show how high these stocks went in recent times.
• This list is based on the market cap of the companies.

Why Should You Invest in Penny Stocks in 2024?

It's probably the most common question that investors have. The answer is simple. Penny stocks offer higher returns than other stocks. You can quickly buy, sell, and navigate the market because penny stocks are highly liquid.

These two factors make them more approachable than investing in other types of assets, such as real estate or mutual funds, which can be difficult for someone who does not have much experience investing or trading stocks.

However, remember, every coin has two sides. As much as the high returns are exciting, penny stocks carry a high level of risk.

Features of Best Stocks Under 10 Rs in India

Here are the key features of penny stocks:

Low Market Price

As discussed, penny stocks are, by their definition, the ones that are available at a rather low market price. Price-wise, penny stocks are casually categorized under different price heads, like - penny stocks under 1 rupee, penny stocks under 10 rupees, etc. 

The reason behind their low price is the low market capitalization of the company. It is not that their price always remains less. Some penny stocks can grow substantially in value and become multi-bagger stocks.

High Volatility

Penny stocks are also known for their high volatility. Big traders who prefer short-term profits, buy and sell penny stocks in huge quantities.  

For example, you can buy 10,000 units of a penny stock of ₹1 with just ₹10,000. The buying and selling of such low-priced stocks in such high quantities induce extreme volatility. This is the reason why the price of penny stock changes very sharply in an unexpected manner. For the same reason, penny stocks are generally considered risky investment options.

Low Liquidity

Yet another risk factor in penny stocks is that they have considerably low liquidity and may push traders into a situation where they do not get enough buyers to sell the holdings or enough sellers to square their short positions. 

Chance for Big Returns

One of the main reasons people draw towards penny stocks in India is the incredible growth some of these stocks have shown. The best penny stocks list is full of numerous stocks that have multiplied in their value exponentially within a very short period of time. Such stocks, as we read above, are called multi-bagger penny stocks.

Let's understand it better. Imagine you buy 5,000 units of a 2-rupee stock. You spend a total of ₹10,000. If the price of that stock goes up by just 50 paise (to ₹2.5), your investment would be worth ₹12,500. That's a 25% profit! Sounds impressive? Well, wait till you hear that some penny stocks have delivered returns of 300%, 400%, or even skyrocketed to more than 1,000% in just a short timeframe!

Benefits of Investing in Stocks Under 10 Rs

The main benefit of investing in penny stocks is their ability to give higher returns quickly. Let's understand the other advantages of penny stock investments.

Ability to Turn Multi-Bagger

A number of penny stocks have turned out to be multi-baggers in the past, and such stories keep coming now and then from the colony of penny stocks. It's not rare to hear of a penny stock that traded below ₹5 a year ago now being priced at ₹500. So, don't be shocked. It is pretty "normal" with penny stocks.  

Opportunity to Invest Early at a Low Price

Several penny stocks, initially overlooked by a majority of investors, have become market favorites in a short time.

Take the example of Adani Green, a top market cap company. Initially listed at around ₹50, Adani's stock price crossed the mark of ₹3,000 within less than four years, reporting around a 6,000% increase in value. This massive growth gave the early investors great returns and made the company stand out among the giants.

Free Platform to Learn Fundamental Analysis

If you want to be the next big bull and a place to test your fundamental analysis abilities, penny stocks offer an ideal playground. Investors can identify future multi-bagger penny stocks by selecting the top penny stocks from, let's say, a list of 50 best penny stocks in India 2024 with good fundamentals and doing an in-depth analysis of the companies.

Even if you see one out of 10 stocks succeeding, as per your expectations, you will become even more confident with your trades. A stock with a solid fundamental only can become a multi-bagger, and with sound knowledge of fundamental analysis, you can easily filter those stocks.

Suggestions for Penny Stock Investment in 2024

While we learn the benefits of investing in penny stocks, we should also make it explicitly clear that there is an equal or greater chance of penny stocks failing to perform. 

The success-to-failure ratio in penny stocks is incredibly low. Low liquidity, high volatility, and non-availability of proper knowledge of the company pose higher investment risks.

But there are ways through which you can take the risk of investing in penny stocks and still mitigate the risk. How? Let's learn in brief.

Don't Put All Your Eggs in One Basket

The famous "diversification" rule is also applicable to penny stocks investment. The objective here isn't just risk reduction but also optimizing potential profits. 

For illustrative purposes: If you've set aside a portion of your capital - say 2-3% or ₹20,000 from a total of ₹10 lakh - for penny stocks in India, consider spreading it across different stocks. You can use this ₹20,000 to buy 4,000 units of penny stocks priced at ₹5 (high valued and safe in this case). Instead of buying 4,000 units of a single stock, you bought 500 units of eight different penny stocks. Even if two out of the eight turn into multi-baggers, this diversification could compensate for the other losses. 

Penny Stocks with Strong Foundation and Fundamentals 

There's a curiosity around penny stocks under ₹1. On the other hand, some investors also look at penny stocks in India that might be priced slightly higher but appear to have stronger fundamentals. 

This isn't to say that higher-priced stocks are always better, but it's a reflection of the diverse range within the category of penny stocks. 

Again, the emphasis is on being informed and understanding the landscape before making decisions.

What Makes Penny Stocks Risky?

Most investors know that penny stocks are risky, but what makes them so? There are many reasons why an investment in penny stocks is considered high-risk:

1. First, they are highly volatile, meaning their prices can change rapidly and dramatically. This means that you could make a lot of money quickly, but it also means that you could lose everything if the price of your stock drops too low.
2. The second reason why penny stocks are risky is that they tend to be very illiquid. This means there aren't many sellers or buyers, making it difficult to sell your stock if you need to cash out early. To sell your shares, you must wait for someone else who wants them simultaneously (which isn't likely).

Penny Stock Scams

Penny stock scams are prevalent in India. The lack of awareness about the risks involved in trading with penny stocks makes it easy for penny stock scammers to scam people.

The primary aim of a penny stock scam is to convince investors that they will make money by buying into a company's shares at a low price and then selling them at a much higher price once their value increases. The problem with this approach is that there is no guarantee that the value will increase; if it does, it may not increase enough for you to make any real money from your investment.

Alternative Options to Penny Stocks in India

The following article will help you find other options for penny stocks in India.

• You can try your hand at Forex Trading as well. Many beginners make the mistake of thinking Forex trading requires a lot of money and experience. But this is not true! All it takes to be a successful Forex trader is hard work, dedication, patience, and consistency.
• If you have been investing in stocks for some time now but don't want to mess with the headache associated with day trading, then it might be time for you to consider investing in mutual funds instead! Mutual funds allow access to professionally managed portfolios that are diversified across many different asset classes.

Things to Keep in Mind While Buying Penny Stocks

Before you invest in penny stocks, there are several things you need to consider.

• Ensure the company is listed on a reputable exchange (e.g., NYSE or Nasdaq).
• Ensure that the company has been around for at least three years and has sufficient revenues and profits.
• Make sure that the company's balance sheet is strong enough: current assets should be greater than current liabilities plus total debt.
• Don't consider penny stock investment to be a get-rich-quick scheme. The promise of huge returns attracts many investors who want to jump on board and make some serious cash however, it is an investment with little possibility of success.

A final comment on the Penny Stocks List

To conclude, penny stocks may not and should not take center stage in your investment portfolio. However, at the same time, they should not be ignored as well. Devising a proper investment strategy based on the aforementioned tips, you can also increase your chances of feeling proud to become an early investor in one of the multi-bagger penny stocks of 2024.

This is not an investment advisory. The blog is for information purposes only. Investments in the securities market are subject to market risks, read all the related documents carefully before investing. Past performance is not indicative of future returns. Please consider your specific investment requirements, risk tolerance, goal, time frame, risk and reward balance, and the cost associated with the investment before choosing a fund or designing a portfolio that suits your needs. The performance and returns of any investment portfolio can neither be predicted nor guaranteed.