Best Stocks Below Rs 5 in India: Why Are They Priced So Low?

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Best Stocks Below Rs 5 in India 2022: Why Are They Priced So Low?

Best Stocks Below Rs 5 in India 2022: An Overview

The stock market offers several different kinds of assets that can help you gain huge returns. Mostly, investors like subscribing to assets that may offer them steady returns. Although the profits on this type of investment are generally secure, they are not significantly high. Remember that in the stock market, you can diversify your portfolio and purchase affordable shares to earn substantial profits from the same.

Penny stocks under 5 Rs. are very inexpensive equities that trade on stock exchanges for very little money. Due to the little information accessible about the firms, their business strategy, and the organization's fundamentals, the majority of these stocks are not popular among a bigger group of investors.

Even if you can find any information on these businesses or companies, it is mostly unreliable. However, with cautious trading, these stocks are under 5 Rs. can occasionally outperform and provide investors with multi-bagger profits within a specified trading session.

Since the majority of these equities are illiquid, a few orders may occasionally be enough to exceed the stock exchange's circuit limit. These stocks under 5 Rs. will be able to provide investors with larger profits once they have been actively trading for a predetermined period of days.

Best Stocks Below Rs 5 in India: Main Characteristics

Here is a list of characteristics of under 5 rupees share:

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

Penny Stocks Under Rs 5: Why Are They Priced So Low?

Due to the fact that the majority of investors do not engage in or invest in penny stocks under 5 Rs., their trading prices are significantly lower. Additionally, if an investor has purchased these stocks and already received a substantial return on their investment, they will attempt to sell them as quickly as feasible.

Some of these stocks are not sufficiently transparent, and occasionally they do not adhere to exchange requirements. The value of these penny stocks under 5 Rs. can change in response to certain events or news.

The trading volume of these equities showcases considerable growth as a result of speculative activity, and the stock prices likewise hit new highs. Only a small percentage of these penny stocks under 5 Rs. are real and have solid fundamentals. Any negative news can significantly lower the trading price of these equities.

Best Stocks Below Rs 5: How to Invest in Them?

Carry out independent research

Despite the fact that penny stock businesses are registered on stock exchanges, they are often mainly small companies and as a result, are not well recognised by investors. You need to be aware of the business, its offerings, and most importantly, what you are investing in, before deciding to buy penny stocks under 5 Rs. Don't invest in a firm whose fundamentals are shaky or are on the verge of bankruptcy.

Be careful with your investment

Despite the equities' incredibly cheap pricing, resist the urge to purchase a large number of shares. Due to the fact that penny stocks in India below 5 rupees are always dynamic, you should confine your investment to no more than two to three different businesses in order to carefully monitor them.

Think of making short-term investments

Consider your investment in ultra-penny stocks as a short-term one and proceed accordingly. Because of how erratic these stocks are, you should choose a short-term investment plan. Due to its unpredictability, you may make a lot of money today while simultaneously losing considerably more the following day. However, we must remember that profiting from the stock market is not a straightforward endeavor.

Don't go with the flow

Penny stocks sometimes involve rumors, which is the cause of the shares' trading price volatility. When trading penny stocks, a lot of traders choose the pump-and-dump method.

In this method, rumors are disseminated about particular stocks, and investors buy such stocks in large quantities to demonstrate that there is a big demand for them. The public begins buying these stocks after noticing the unexpected increase in demand, but their purchase is entirely a fluke and is not based on any kind of financial plan.

The traders sell all of their stocks whenever the stock prices hit a predetermined threshold, which has a significant impact on the share price. When the share price drops sharply, the general public loses money. Due to the high level of risk involved in penny stock under 5 Rs., they might not fit into everyone’s investment plans.

Best Penny Stocks Under Rs 5: Understanding Them

In India, stocks under 5 Rs. are traded at very low prices and volumes on stock exchanges. Many new traders experiment with penny stock trading because of its incredibly cheap price. Due to its potential to offer enormous returns on investment, it is also well-liked by smaller but experienced investors.

Gains on penny stocks can range from 300 to 500%, and occasionally much more. For instance, if you invest Rs. 100, you can receive Rs. 500 as a return on your investment. In India, penny stock businesses typically have a market valuation of less than Rs. 10 crores.

Best Stocks Below Rs 5: Features

All the features of the best stocks below Rs. 5 in India 2022 are mentioned below:

Extremely affordable

The price of penny stocks on the Indian stock markets is less than Rs. 5. As a result, you can buy a large number of penny stocks by spending a small amount from your funds.

High-profit margin

Penny stocks provide substantially larger returns on investment than the other types of securities that are offered on the market. The development potential for the shares issued by micro and small businesses is immense, but they also carry a high degree of risk due to their potential for strong reactions in the case of market fluctuations.

Fluctuating share price

Penny stocks may not achieve the appropriate price ceiling at the time of selling. The profit margin may occasionally even drop or disappear entirely. The prices of penny stocks have the potential to rise sharply at the same moment, providing you with a potentially huge profit margin.

Ambiguous in nature

Due to the fact that the firms producing the shares are comparably unpopular, under 5 rupees shares are utterly illiquid. Finding investors ready to put their money into the equities of these companies is quite difficult. These businesses have a difficult time staying afloat amid emergencies.

Best Penny Stocks Under Rs 5: Why Purchase Them?

The firms that issue penny shares have the potential to experience rapid development and evolve into substantial businesses, but they also run the risk of suffering a sizable loss. However, even as a short-term investment, as a shareholder, penny stocks should be a part of your portfolio. Let's examine the benefits of purchasing ultra-penny shares:

Extremely affordable

The cheapest shares to purchase are penny stocks, which are really inexpensive. You may easily invest in them without using a sizable chunk of your overall investing budget. More importantly, you can easily allocate a little percentage of your investment funds to buy the best stocks below Rs. 5 in India 2022. The remaining money can be used to make safer investments, lowering the risk associated with your existing investment.


Some of the stock market's inexpensive stocks have the potential to become multibaggers, which indicates that their stock prices might rise by multiples of the initial investment. A particular share is deemed a double-bagger if it doubles the amount invested.

The stock will be considered a ten-bagger if the share price increases to 10 times the initial investment value. If you buy these inexpensive stocks for Rs.5 or less, you can be successful in raising your overall profit margin. However, before choosing inexpensive stocks with the potential to become multi-baggers, you must do a comprehensive analysis of the low-price share list for 2022.

Best Stocks Below Rs 5 in India

Here is a list of the best share under 5 Rs. you can  buy today:

NameSubsectorMarket Cap (Cr.)Close Price (Rs.)1 Year return (%)
Khoobsurat LtdInvestment Banking and Brokerage25.371.91730.43
BLS Infotech LtdIT Services123.872.83708.57
Anshuni Commercials LtdPrecious Materials, Jewellery and Watches0.104.18423.81
Quadrant Televentures LtdTelecom Services107.761.76363.16
BCL Enterprises LtdDiversified Financials19.591.68330.77
Greencrest Financial Services LtdFinance78.952.16315.38
DSJ Keep Learning LtdPublishing37.224.25304.76
Visesh Infotecnics LtdIT Services and Consulting226.470.60300.00
Sawaca Business Machines LtdCommodities Trading14.761.29290.91
Panafic Industrials LtdDiversified Financials11.741.43257.50

(Data as of 2nd November 2022)

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

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