Best Stocks Below Rs 10 in India 2022: Key Points to Consider Before Investing in These Stocks

best stocks below Rs 10 in India 2022
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Best Stocks Below Rs 10 in India 2022: Overview

When dealing with the share market or stock market investments, usually investors opt for low-risk investments that can provide them with fund security and better returns altogether. Yet, as an investor, you also have the option to invest in penny stocks in India below 10 rupees in the stock market and these unvalued stocks also have the potential to provide you with a huge return on investment. 

Furthermore, the return on investment you will receive from a small company’s undervalued stocks will be much more than any large-cap or mid-cap company’s shares. The investment made in quality but undervalued stocks is known as value investing. In this article, we will get to know more about value investing and how you can invest in the best stocks under 10 Rs.

What is Value Investing?

Value investing is a special investment strategy where the investor concentrates on the intrinsic value of the shares which they derive from fundamental analysis. According to this strategy, every company share or stock has a specific true or intrinsic value. 

If any company stock is available at a significantly discounted price in comparison to its real value then as a value investor you can definitely bag this opportunity and become a shareholder of those undervalued companies. You can utilize this opportunity and earn a huge amount of returns from the stock market itself.

British-born American professor and investor, Benjamin Graham is considered the father and pioneer of value investing. By utilizing his investment strategy, his most celebrated student and the world’s richest investor Warren Buffet has become the best investor in the stock market. A value investment strategy is not speculative and it is entirely based on the fundamental analysis of the company.

Best Stocks Below Rs 10 in India: Key Things to Know

As a follower of the value investment strategy, the first step you should take is to search for the stocks in the share market that are priced below 10 rupees but according to the fundamental analysis of the company, their intrinsic value is much more. 

In this scenario, whatever company you have decided to invest in should have the potential for development and growth. That is how the share price of the same company will rise with enough time and it will also satisfy the intrinsic value of its shares.

Let us look at an investor’s approach toward value investing with a few simple steps:

  • First of all, as a share market investor you need to research different undervalued stocks present in the stock market at a significantly lower price (for example, Rs. 10).
  • Then you will need to conduct thorough research on those stocks and conduct a fundamental analysis of those companies.
  • After conducting an analysis and research about the company stocks, you will be able to create a list of company stocks that are undervalued and have room for tremendous growth in the near future.
  • The next step for you would be to buy those company stocks that are available at a discounted price.
  • The value investment strategy recommends investors to purchase and hold on to the stocks diligently until they have reached their true worth and sell them for a huge return on investment.

The main aim of the value investors is to purchase the quality stocks that are extremely undervalued in the current stock market and sell them at the best prices after holding them impassively. 

Using fundamental analysis, you can decipher the intrinsic value of the stocks and know when the undervalued stocks will be ready to be sold at the right price. Furthermore, using this investment strategy investors will also have a margin of safety ensured. 

Advantages of the Value Investment Strategy

Value investing is for all

Using the value investment strategy everyone can become a successful investor in the Indian stock market. You do not necessarily need to be financially well-off or exceptionally qualified in order to become a value investor. If you follow the correct value investment approach and wait long enough so that the quality (but undervalued) stocks reach true potential then you can easily become a value investor.

Nevertheless, you need to be extremely patient when it comes to value investing and ignore the short-term market fluctuations. You also need to continuously read, learn, understand and assess the current stock market condition in order to become a successful share market investor. The studies will also help you find out the best low-price shares available in the share market today.

Employ the power of compounding 

With the help of compounding, you can turn even small investments into huge sums, and value investing provides you with the opportunity to do the same. This investment strategy suggests the investors and shareholders to buy and hold the share until they provide enough returns.

During this time, you can reinvest the dividends and returns that you have received from the shares. This is how you will be able to grow your funds and returns massively. Moreover, you won’t have to give any extra effort because your funds will be able to generate income on their own.

An efficient and already proven investment strategy

When it comes to stock market investment, value investing is considered as one of the most profound investment strategies available in the market. With the assistance of this investment strategy, you will be choosing the shares that are extremely undervalued (but quality stocks) in comparison to their real or intrinsic value. Usually, these company stocks are of high quality, robust in nature, and have tremendous development and growth potential.

Less risky and optimal for share market investors

When it comes to investing in the stock market there is always a certain amount of risk involved and that is why most investors choose less risky and stable investment options. In the case of value investment, the risk factor is extremely low because the investors follow the method of fundamental analysis before choosing any particular stocks to invest in. 

With the knowledge of the company itself as well as its potential for development and growth, value investment is by far the best, most effective, and proven investment strategy. Not to mention, the world’s richest investor (Warren Buffet) himself follows the same investment approach.

Disadvantages of the value investment strategy:

A value investing strategy is a long-term investment strategy that focuses on buying stocks at a low price, which is also known as bargain stocks. It's a great way to make money in the long run, but it can also be risky. 

Value investing is a strategy for investing in stocks considered "cheap." This means that the stock price is low compared to its intrinsic value. For example, if the company has strong growth prospects, you should consider buying it because its stock price will eventually catch up with its valuation. However, there are several disadvantages of the value investment strategy that you should consider before investing in these stocks.

Here are some of the drawbacks of the value investing strategy:

1. You need to have a lot of patience. Value investing requires a lot of patience because it can take years for a stock to recover from its low valuation and become profitable again. This means that investors who use this strategy must have faith in their investments and be willing to wait for results before they can start profiting from them.

2. When you invest in value stocks, you should keep an eye on the company's financial health and also its management team because if these two factors are not good enough or if there's some issue with them, then it will be difficult for you to make profits from these stocks because most of the time these companies have bad business practices which means that they won't survive for too long in this market scenario, so it's better to avoid investing in such companies unless you want to lose money.

3. Another drawback is that most of these companies don't pay dividends which means that even if they grow exponentially over time, then there's no way for investors like us who have invested our hard-earned money into such firms can earn anything back from them since we're not getting any dividends from these firms!

4. It cannot be easy to pick winning stocks. Value investing requires thoroughly researching companies before deciding which will make suitable investments. This means that you need to spend lots of time reading company reports and financial statements so that you can get an idea about whether or not they are worth buying shares from them at all times before investing money into them to increase your profits considerably over time

Things to consider before purchasing stocks below 10 rupees

Before investing in any company stocks in the stock market, as an investor, you need to thoroughly analyze the company stocks you want to buy along with other necessary factors. For example, you should look at the company's products and services, its financial strengths, business fundamentals, long-term goals, capital structure, and much more. 

Moreover, these particular factors can provide enough information about the company which in turn can help the investor decide whether the stocks of any particular company are good for long-term investment or not. As a share market investor, you should also check out if the company you want to invest in provides its shareholders with regular dividends.

In order to find out the intrinsic value of the company stocks, you need to check other financial and stock market metrics such as brand value, cash flow, annual revenue, profits, market responses, business and revenue model, fiscal performance, etc. These specific metrics can provide you with an insight into why the stocks of the same company are undervalued in the current market condition.

In addition to these, you should also check other important factors that can help you control your investment decisions:

P/E ratio or Price-to-earnings ratio

The P/E or Price-to-earning ratio is very important when it comes to choosing an undervalued company stock. It determines the interrelation between the company’s share price and the funds the company has raised while distributing its equity shares to investors in the stock market. With the help of the P/E ratio, investors can evaluate the market performance of the stocks and find out if they will be profitable enough for long-term investment.

P/B ratio or Price-to-book ratio

P/B ratio or Price-to-book draws a correspondence between the current share price of a company and its book value. A company’s book value is the result of the company’s assets divided by the number of company shares unleashed in the market. With the help of the P/B ratio, you will be able to analyze the financial position of a company and whether it will be beneficial for you to invest in the company shares.

Best Stocks Below Rs 10 in India 2022

Find out the best stocks below Rs 10 in India 2022 for long-term investment from the table below:

NameMarket Cap (Cr.)P/E RatioNet Profit Margin (%)Close Price (Rs.)
Fourth Dimension Solutions LtdRs. 15.680.402,205.627.20
Mahesh Developers LtdRs. 2.9642.23700.007.12
Gajanan Securities Services LtdRs. 3.102.40174.3210.00
Inventure Growth & Securities LtdRs. 226.804.9190.102.70
Pae LtdRs. 6.510.5489.086.20
GB Global LtdRs. 3.080.0088.649.30
Regency Ceramics LtdRs. 9.120.2884.933.45
Seven Hill Industries LtdRs. 11.703.0784.480.90
Ashirwad Capital LtdRs. 21.2421.4581.155.31
Kore Foods LtdRs. 5.102.1980.074.38

(Price date as per July 13, 2022)

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


 Shares Under Rs 10 – Highest Earning Per Share

Company NamePrice (Rs). 31 Dec'21Price (Rs) 23 Sep'22Return
Tine Agro Ltd.6.812.3281.18%
Kaiser Corporation Ltd.2.7971.052446.59%
BLS Infotech Ltd.0.633.06385.71%
Khoobsurat Ltd.0.52.09318.00%
Kiran Syntex Ltd.5.366.3718.84%
Hemang Resources Ltd.3.0943.551309.39%
Visesh Infotecnics Ltd.0.290.7141.38%
Elegant Floriculture & Agrotech (India) Ltd5.29.0173.27%
Swiss Military Consumer Goods Ltd.10.4619.8589.77%
Corporate Courier & Cargo Ltd.7.399.1123.27%
Triveni Glass Ltd.7.6220.7171.65%
Tranway Technologies Ltd.6.6510.963.91%

(Prices as on 23 Sep 2022)

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

Stocks Below Rs 10 – Highest Dividend

Company NamePrice 31-3-22 (Rs)Price (Rs) 23 Sep 2022Return
Raj Rayon Industries Ltd.2.2415.9609.82%
Mid India Industries Ltd.8.5614.2466.36%
Sylph Technologies Ltd.6.2212.74104.82%
MPL Plastics Ltd.6.4216.25153.12%
Sankhya Infotech Ltd.5.617.9441.53%
Quest Softech (India) Ltd.5.2639.1643.35%
Madhuveer Com 18 Network4.9913.05161.52%
Gujarat Cotex Ltd.3.574.0212.61%
Impex Ferro Tech Ltd.2.585.8124.81%
Zenith Steel Pipes & Industries2.365.75143.64%

(Prices as on 23 Sep 2022)

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

How to invest in the share market for beginners in India?

In India, there are two exchange markets (BSE and NSE) available through which you can invest in the cheapest share in India available in the same. You also have the option to buy the same directly through the company website or you can utilize the services of a third-party platform such as INDmoney.com.

By signing up on INDmoney.com you can freely choose the company shares you want to invest in and purchase the number of stocks you want according to your budget. The best part about buying stocks through INDmoney.com is that you won’t have to worry about any extra paperwork and the whole process will be effortless. 

To initiate your investment journey with any INDmoney.com follow the steps below:

  1. Visit INDmoney.com and sign up or create your free Demat account.
  2. Fill in all the important details including phone number, name, email address, etc. You can also utilize your Google account and your contact number if you wish to sign up directly on the INDmoney.com website.
  3. After you have completed signing up on the website you will need to provide your Aadhar card number, PAN number, and bank account details in order to complete your e-KYC process.
  4. After you have completed the e-KYC process, you can choose the list of stocks available at https://www.indmoney.com/.

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. 

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

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