Best Penny Stocks to Buy now in India

Last Updated – March 2021

Best Penny Stocks to Buy now in India

In this article, we will cover

– What are penny stocks?
– Things to keep in mind before investing in penny stocks
– A complete list of penny stocks to buy: these are best penny stocks to buy right now listed in India, You can choose to invest in these penny stocks after proper research
– A detailed video on penny stocks to buy covering model portfolio an explanations

So first let’s understand What are penny stocks?

Penny stocks are stocks that trade at very low prices, have low market capitalization, and are mostly illiquid. These stocks (penny stocks) are lesser-known to the larger investing public as investors remain away from them because the information regarding their fundamentals and businesses is either not reliable or not available. However, they are also known for multi-bagger returns within certain trading sessions.

As penny stocks are mostly illiquid meaning traded in very less quantity, sometimes only a few orders can lead to hitting the circuit limit on the exchange. These stocks mostly give higher returns when hitting circuits for a number of days. Though this period of hitting circuit is not accompanied with trading volumes, either there is some story moving around that stock or it might be a result of manipulation by some stock operators who artificially inflate the price and volumes to bring in innocent retail investors and then later offloading their own holdings when participation increases. Now that we have understood what are penny stocks lets see why are penny stocks called “Penny” Stocks

Penny stocks are penny stocks for a reason!

Penny stocks trade at such low rates for a reason because most of the traders buying penny stocks don’t even care about them and look to exit sooner or later once they have given decent returns. Penny stocks in India are often found non-compliant with exchange regulations and non-transparency in reporting.

It is only when there is some news or some turnaround stories on penny stocks, that they move. The speculation leads to an increase in trading volumes and prices soar. But very few of them turn out to be true or genuinely fundamentally stronger. Any negative news causes the price to turn south.

List of Best Penny Stocks to Buy now in India

Sr. No Company Name BSE Scrip Code NSE Symbol CMP (Rs.) 19 Feb 2021 Rating
(Stars)
Industry
1 ALOK INDUSTRIES LTD 521070 ALOKINDS 20.05 #N/A TEXTILES
2 DISH TV INDIA LTD 532839 DISHTV 11.85 0.5 BROADCASTING & CABLE TV
3 MOREPEN LABORATORIES LTD 500288 MOREPENLAB 29.45 0.5 MOREPENLAB
4 GMR INFRASTRUCTURE LTD 532754 GMRINFRA 25.2 0.5 AIRPORT SERVICES
5 HFCL 500183 HFCL 29.3 0.5 TELECOM CABLES
6 VODAFONE IDEA LTD 532822 IDEA 10.9 0.5 TELECOM SERVICES
7 JAMMU&KASHMIR BANK LTD 532209 J&KBANK 30.2 0.5 BANKS
8 BANK OF MAHARASHTRA LTD 532525 MAHABANK 23.35 0.5 BANKS
9 INDIAN OVERSEAS BANK 532388 IOB 17.6 0.5 BANKS
10 MMTC LTD 513377 MMTC 30.35 0.5 COMM.TRADING & DISTRIBUTION
11 NBCC LTD 534309 NBCC 37.65 0.5 CONSTRUCTION & ENGINEERING
12 RAIL VIKAS NIGAM LTD 542649 RVNL 30.65 0.5 CONSTRUCTION & ENGINEERING
13 NATIONAL FERTILIZERS LTD 523630 NFL 39.3 0.5 FERTILIZERS
14 SJVN LTD 533206 SJVN 28.05 2 ELECTRIC UTILITIES
15 MANALI PETROCHEMICAL LTD 500268 MANALIPETC 48.1 0.5 PETROCHEMICALS
16 TV18 BROADCAST LTD 532800 TV18BRDCST 30 0.5 BROADCASTING & CABLE TV
17 TRIDENT LTD 521064 TRIDENT 14 0.5 TEXTILES
18 NHPC LTD 533098 NHPC 25.85 1 ELECTRIC UTILITIES
19 UJJIVAN SMALL FINANCE BANK LTD 542904 UJJIVANSFB 35.1 3 BANKS
20 HBL POWER SYSTEMS LTD 517271 HBLPOWER 33.7 0.5 HBLPOWER
21 YES BANK LTD 532648 YESBANK 15.95 1 BANKS


People who generally trade or invest in penny stocks are the lower class of retail investors who do not keep a portfolio approach and invest in them based on news or tip from some random source, thinking the price is already beaten down too much and they will not lose much but if that turns out to be true it will double or triple their capital. However, investors should always keep in mind that they might be investing in small amounts but still, they can lose 100 percent of their capital.


Things to keep in mind while buying penny stocks

The risk a penny stock will go bust is equally high. The company can suddenly shut down or there can be very little probability of giving multi-bagger returns. The capital that deserves to be invested in penny stocks should not be more than 2 to 3 percent of a person’s portfolio value.

Investing in penny stocks is always on speculation. First of all, investors should avoid investing in them and if they buy any it should be treated as buying a lottery. You should never become emotionally attached to them in the hope of some good news.

Investors should also never follow a buy and hold approach even if they have got good returns recently. Because over a period of time neither they are able to generate value for shareholders nor they follow a transparent reporting system. Investors should also research extensively about the stock and the news going on in the public domain and not become the victim of operators’ conspiracy, who later offload their holdings after manipulating the price.

The transaction cost for some penny stocks is also higher and on some the brokerage is charged on a per-share basis. Similarly when stocks trade at a very low price, the spread between the bid and ask price also turn out to be significant in terms of percentage.

The stocks mentioned in the watchlist have been determined after keeping in mind news, speculation, trend in their price chart, and a few fundamental factors such as debt to equity ratio and cashflows.

But this information will vary on a day to day basis depending on the newsflow and an investor should make some relevant background checks in his capacity before investing in these stocks.

Below is some more information about Best penny stocks in India

Vodafone Idea Ltd

Vodafone Idea Limited is an Aditya Birla Group and Vodafone Group partnership. It is India’s leading telecom service provider. It is the third largest wireless operator by subscribers in India with a Revenue Market Share of approximately 15.9% of the Indian mobile telecommunications services industry. The Company provides pan India Voice and Data services across 2G, 3G and 4G platforms.

Competition from peers such as Reliance Jio and Airtel is a major blow to Vodafone’s business as it is losing subscribers slowly to them. Vodafone can be on a speculator’s radar, however, it is extremely risky and volumes should be closely observed before buying this stock.

NHPC Limited

NHPC Ltd is a Mini-Ratna Category-I Enterprise of the Government of India. The company is one of the largest organizations in the field of hydropower development in the country. It is a hydroelectric power generating company dedicated to the planning development and implementation of an integrated and efficient network of hydroelectric projects in India.

They execute all aspects of the development of hydroelectric projects, from concept to commissioning of the projects. The company has a good dividend yield of around 6.17% and low debt to equity ratio. The stock has a broader price range and generally fluctuates within a range from Rs 14 to 34 and has average yearly volatility of 40 percent.

Morepen Laboratories

Morepen Laboratories is a Pharmaceutical company. Morepen has steadily grown from a single product company to a multi-activity company with a global vision and satisfied customers in over 50 countries. The company has three state-of-the-art manufacturing plants in the northern state of Himachal Pradesh (HP) in India. The main plant at Parwanoo is inspected and approved by the United States Food and Drug Administration (USFDA) for production of Loratadine, which is the best selling anti-allergy drug globally.

It is the largest producer of Loratadine in the World and presently has over 90% market share of generic Loratadine in the US market, a supplier to top-class customers like Novartis, Merck, etc. The company has a good debt to equity ratio of 0.05. Since the last 10 years, this stock has been moving in a broader range of Rs 2.5 to 45 on the higher side and has an average daily volume of around 18 lakh shares.

Manali Petrochemical Ltd.

Manali Petrochemical Ltd. (MPL) is a petrochemical company based in Chennai. It markets propylene glycol and polyols. Manali Petrochemical annually produces 27000 metric tonnes of propylene oxide, 14,000 metric tonnes of propylene glycol and 15,000 metric tonnes of polyether polyol and system polyol. These chemicals are key inputs for the manufacture of polyurethane foams having wide ranging applications.

Propylene glycol is extensively used in pharmaceuticals, food flavours, essences, cigarettes, cosmetics and perfumery. The company has a good debt to equity ratio of 0.03 and a good dividend yield of around 1.26%. The stock has high historical volatility. For the last 10 years, this stock has been moving from Rs. 6 to 46 and has an average daily volume of 30 lakh shares.

HBL Power Systems

HBL Power Systems Ltd is a listed Indian company, in business since 1977, with a focus on engineered products and services. The company’s business strategy was to identify technology gaps in India that they could fill by ‘indigenous efforts’. The first products selected and successfully developed were Aircraft batteries – eventually leading to HBL offering the world’s widest range of specialized batteries. Now the company has become a leading supplier of specialised batteries and power electronics in India with a strong presence in several other countries. The stock has been moving horizontally since the last 10 years from Rs 10 to 60 with an average daily volume of 4 lakh shares.

Here’s a quick video from our team on how you can select the Best Penny Stocks:

List of Penny Stocks in India: Model Watchlist

If one wants to bring down the list to 4 to 5 stocks for closely tracking, then the below table is suitable for a beginner. 

Sr. No Company Name BSE Scrip Code NSE Symbol CMP (Rs.) 19th Feb
1 Vodafone Idea 532822 IDEA 10.9
2 NHPC 533098 NHPC 25.85
3 Morepen Laboratories 500288 MOREPENLAB 29.45
4 Manali Petrochemicals 500268 MANALIPETC 48.1
5 HBL Power Systems 517271 HBLPOWER 33.7

A detailed table with various parameters for Best penny stocks to buy:

Sr. No Company Name BSE Scrip Code NSE Symbol CMP (Rs.) 19 Feb 2021 Rating
(Stars)
Industry PE ratio Dividend yield (%) ROCE (%) 5 year average  ROE (%) Debt equity ratio 5 yr CAGR revenue (%) 5 yr CAGR PAT (%)
1 ALOK INDUSTRIES LTD 521070 ALOKINDS 20.05 #N/A TEXTILES N/A 0 -4.48 N/A N/A -32.7
2 DISH TV INDIA LTD 532839 DISHTV 11.85 0.5 BROADCASTING & CABLE TV 3.09 0 10.2 9.18 0.19 5.76 163
3 MOREPEN LABORATORIES LTD 500288 MOREPENLAB 29.45 0.5 MOREPENLAB 16.4 0 10.2 10.5 0.05 16.3 73.4
4 GMR INFRASTRUCTURE LTD 532754 GMRINFRA 25.2 0.5 AIRPORT SERVICES N/A 0 6.56 N/A -5.41 5.53
5 HFCL 500183 HFCL 29.3 0.5 TELECOM CABLES 23.5 0 21.4 17.2 0.47 8.5 -9.17
6 VODAFONE IDEA LTD 532822 IDEA 10.9 0.5 TELECOM SERVICES N/A 0 -5.44 -41.1 7.33
7 JAMMU&KASHMIR BANK LTD 532209 J&KBANK 30.2 0.5 BANKS N/A 0 3.51 -5.58 15.7 3.65
8 BANK OF MAHARASHTRA LTD 532525 MAHABANK 23.35 0.5 BANKS 37 0 4.74 -16.1 14.1 -1.92 -3.25
9 INDIAN OVERSEAS BANK 532388 IOB 17.6 0.5 BANKS 54.3 0 1.53 -33.3 14.1 -6.17
10 MMTC LTD 513377 MMTC 30.35 0.5 COMM.TRADING & DISTRIBUTION N/A 0 -2.42 -5.35 3.36 1.91
11 NBCC LTD 534309 NBCC 37.65 0.5 CONSTRUCTION & ENGINEERING 34.4 0.32 20.5 18.5 0 13 -22.4
12 RAIL VIKAS NIGAM LTD 542649 RVNL 30.65 0.5 CONSTRUCTION & ENGINEERING -0.86 3.48 11.8 14.7 0.88 35.8 17.5
13 NATIONAL FERTILIZERS LTD 523630 NFL 39.3 0.5 FERTILIZERS 7.95 2.12 5.69 11.4 2.84 9.06 49.5
14 SJVN LTD 533206 SJVN 28.05 2 ELECTRIC UTILITIES 6.06 8.66 16.9 12.9 0.15 -0.86 -1.4
15 MANALI PETROCHEMICAL LTD 500268 MANALIPETC 48.1 0.5 PETROCHEMICALS 7.81 1.26 12.7 13.7 0.03 -1.59 0.09
16 TV18 BROADCAST LTD 532800 TV18BRDCST 30 0.5 BROADCASTING & CABLE TV 13.8 0 12.4 3.53 0.4 17.4 -7.02
17 TRIDENT LTD 521064 TRIDENT 14 0.5 TEXTILES 26.4 2.58 10.2 11.8 0.28 4.82 23.6
18 NHPC LTD 533098 NHPC 25.85 1 ELECTRIC UTILITIES 7.82 6.17 8.61 8.4 0.66 4.01 3.59
19 UJJIVAN SMALL FINANCE BANK LTD 542904 UJJIVANSFB 35.1 3 BANKS N/A 0 9.08 N/A 4.65 N/A N/A
20 HBL POWER SYSTEMS LTD 517271 HBLPOWER 33.7 0.5 HBLPOWER 70.3 0.8 6.06 3.88 0.13 -4.15 -3.26
21 YES BANK LTD 532648 YESBANK 15.95 1 BANKS N/A 0 -0.52 -4.39 10.1 17.6

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27 Comments

  1. Penny stocks might look lucrative, however, investors should check out this list of model penny stocks that may be good opportunities. Comment and let us know if you find this article helpful !

    1. Shailender Reddy

      Yes it’s useful thanks for the information ✌️

      1. Team Samco

        We’re glad you liked it. Thank you very much for the feedback!

      1. Team Samco

        Thank you very much for the feedback! We’re glad that you liked it.

  2. Ramesh Kumar Vinayak

    Thanks for making investors aware of pitfalls to avoid while investing in Stocks be it large cap,midcap,small cap and penny stocks and how and what to look for

  3. Manav

    Thanks
    It is really good piece of information on this topic.

  4. jai

    very good analysis of stocks but more efforts are required for refine readers

    1. Team Samco

      Dear Customer,

      With regards to your query, please provide your contact number. We shall arrange a callback for you & get your account opening process started.

      For any other queries/information, you can mail us on support@samco.in or raise a ticket on https://www.samco.in/support, our executive shall assist you on the same.

      Looking forward to serving you soon.

      Thanks & regards,
      Team Samco

  5. Pritam kshirsagar

    A good source of information to the traders who are new to the market

  6. युवराज राठोड

    छान माहिती प्रदान करतात आपण धन्यवाद

  7. ASLAMBHAI POTHIAWALA

    I intend to buy penny stock which are making loss due heavy interest burden, but reducing quarter to quarter. I do not want to invest in penny share for just debt free. I study parameters in different way. So please provide the list of such PENNY SCRIPS WHICH ARE LOOSING DUE TO HIGH INTEREST BURDEN and also HIGH DEPRECIATION PROVISIONS.
    ASLAMBHAI POTHIAWALA
    9054440100
    MOBILE AND WHATSAPP NO. 9054440100

    1. Team Samco

      Hello Sir,

      Thank you for reaching out to us!

      With regards to your query, we shall try to meet your requirements by seeking help from our research team. Once ready with the resolution, we’ll get in touch with you.

      For any other queries/information, you can mail us on support@samco.in or raise a ticket on https://www.samco.in/support, our executive shall assist you on the same.

      Looking forward to serving you soon.

      Thanks & regards,
      Team Samco

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