Best Penny Stocks to Buy now in India

Last Updated – March 2021

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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59 Stocks below Rs.50 Our Collection of Best Stocks to Buy Other links you may find useful: