Best Penny Stocks Under Rs 1 in India

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Best Penny Stocks Under Rs 1 in India

A rising trend among investors, especially the youth, is the fascination with penny stocks, particularly those valued under 1 Rupee. While the mantra 'higher returns involve higher risks' holds true, the potential for substantial returns from stocks under 1 Rs is undeniable. Let's delve into the unique dynamics of these investments and explore the opportunities they present in shaping portfolios and navigating the evolving stock market. Discovering the best penny stocks under Rs 1 in India is a strategic move in this investment landscape.

Best Penny Stocks Under Rs 1 in India

Discover the top penny stocks below 1 rupee in India:

Features of Penny Stocks Below 1 Rupee

  1. High returns: As compared to higher-priced equity, penny stocks below 1 rupee provide opportunities for great returns. They have great growth potential but are vulnerable and highly stable to market fluctuations
  2. Illiquid: These stocks are illiquid as the issuing companies are mostly unpopular. This becomes a concern when selling the shares. Usually individuals with a high-risk tolerance investment in penny stocks below 1 rupee
  3. Low cost: These sticks are extremely affordable plus pocket-friendly. An individual can be especially benefited if the price exponentially increases
  4. Unstable Pricing: These penny stocks do not achieve substantial pricing. The capital gains are minuscule unless it is not sold off in large quantities.

Penny Stocks: Understand Before You Invest

Penny stocks are the shares traded in the stock exchange at a very low or steep value with unpredictable high growth and returns yet associated with high risk. The price of these stocks usually range between 0-30 rupees/stock but can grow to an even higher value with time. These are easy to invest in and require very minimum capital but a good amount of research. When these stocks provide you with stellar returns, they are known to be multibagger stocks. We shall further in our discussion look into some of the best multibagger stocks.

Why are Penny Stocks a must in your Portfolio?

As to note, the one thing that is called to be of utmost importance in the world of investment is the mindset of the investor. Some investors like to play with huge risks but unfortunately have a shortage of capital, penny stocks are certainly a breakthrough for such investors. 

Penny stocks, apart from bringing viability in a portfolio carries a number of benefits, especially for the new age investors-the risk-takers. 

The reasons why one must invest in penny stocks in India, especially of below 1 rupee, in 2022 can be summarized by the following points:

High Potential Returns: 

By now, you must have at least gathered a basic gist on the fact that penny stocks have the potential of generating bombarding returns. But how? Well, the logic is very simple, you invest 2000 rupees into some best penny shares of less than a rupee/stock, it increases to let’s say 2 rupee/stock in a month or so, and there you have your investment at a profit of more than 100% within few months, which is not easily possible even in a case of any high growth equity-oriented stock. 

Opportunity to bag a Multibagger Stock: 

Multibagger stocks are as fancy as they sound, if you manage to get your fundamentals correct and identify a multibagger stock you surely can see yourself standing to earn ultimate growth and maximum returns possible. If you may have bought some of the best shares at even 1 rupee, it might be trading at Rs 50 in a few years, thus giving you an unimaginable return provided that you have judiciously studied the background of such a stock. 

Cheap Price Point: 

One of the substantial benefits of investing in penny stock in 2022, is its inexpensiveness. It is easy on your pocket, and you can buy them in bulk without much sweat in your head. It therefore helps you to bring about diversification in your portfolio by saving your interest to invest in other schemes as well

Penny Stocks below 1 Rupee: Cautions to be taken

Aggressive investors shall probably have an incomplete portfolio without a penny stock but investing in these stocks are not very handy. These shares require a strong base of knowledge and must be acted upon with caution. Some of the factors that you must consider especially if you are new to investing in penny stocks are: 

Difficult to access Important Information: 

Most of the penny shares belong to companies that are not very known. To access the background as well as the financials of such companies becomes a very tedious process. The dearth of information is a real issue when it comes to such penny stocks of the microcap companies, as most of the time these are ignored and not potentially covered  by known research firms or traders. 

Price fluctuations:

The price of these penny stocks can be easily manipulated. Most of the times the price of the stocks below rs 1 are subject to artificial inflation/deflation of large traders or promoters. These are also quite prone to hype and dump methods. 

Potential Multibagger Stocks below 1 Rupee: What to keep in mind?

  • Seek expert advice- Sometimes it is an edge to gaze at and compare different avenues through the eyes of someone who has been a long-time player in the field.
  • Do thorough research before investing- You should understand the financials, and average annual returns and compare the profitability, earning capacity, and growth of the potential shares.
  • Make a calculated decision but do not ignore your instinct as well.
  • Penny stocks are bound to attract false information, beware of the same.
  • Take note of the fact that penny stocks are bound to hit the lower circuit at most times.
  • Look out for debt-free penny stocks below 1 rupee, such stocks comparatively have a lower risk of insolvency and have historically been taken as high yield stocks.

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. 
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