In this article, we will cover,– What is an ultra-penny stock – Why do they trade so cheap – Things to keep in mind while determining the best stocks to buy below 10 rupees – A comprehensive list of the best stocks to buy under Rs 10 – A model watchlist comprising 4 to 5 best stocks to buy below 10 rupees – Portfolio companiesStocks that trade at extremely low prices fall in the category of ultra-penny stocks.In the context of the Indian stock market, stocks that trade at prices below Rs10 fall in the category of ultra-penny stocks
Stocks to Buy below Rs 10 - What is an ultra-penny stock?These stocks are lesser-known to 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 these stocks are illiquid 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 offload their own holdings when participation increases.
Why do they trade so cheap?Ultra-penny stocks trade at such low rates for a reason because the larger investing public doesn’t even care about them and look to exit sooner or later once they have given decent returns. They are often found non-compliant with exchange regulations and are not transparent. It is only when there is some news or turnaround event that ultra-penny stocks 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.
You can learn how to invest in best penny stocks from this episode of our show The Right Choices with Oracles of Dalal Street.
Things to keep in mind while determining the best stocks to buy below 10 RupeesPeople who generally trade in ultra-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 friends, 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.The risk an ultra-penny stock will go bust is equally high. The company can suddenly shut down or there can be very less probability for its going concern. The capital that deserves to be invested in ultra-penny or penny stocks should not be more than 2 to 3 percent of a person’s portfolio value.Loving the valuable content? Invite friends to Samco to explore our informative blogs. Earn voucher rewards for each successful referral. Start referring now and reap the rewards
List of Best stocks to buy below 10 Rupees
|Sr. No||Company Name||BSE Scrip Code||NSE Symbol||CMP (19th Dec 2022)||Rating||Industry|
|1||Jaiprakash Power Ventures Limited||532627||JPPOWER||8.15||0.5||Electric Utilities|
Other Agricultural Products
Commercial Trading & Distribution
|4||Radhe Developers (India)||531273||RADHEDE||8.25||0.5||Realty|
|5||Sadbhav Infrastructure Projects||539346||SADBHIN||6.25||0.5|
Roads & Highways
Diversified Commercial Services
|8||Madhav Infra Projects||539894||MADHAVIPL||5.96||0.5|
Construction & Engineering
|10||Facor Alloys||532656||FACORALL||7.97||0.5||Iron & Steel|
|11||Diligent Industries||531153||DILIGENT||9.72||0.5||Edible Oils|
Jaiprakash Power VenturesJaiprakash Power Ventures Limited is engaged in the generation of power, including hydro and thermal; cement grinding; captive coal mining, and transmission of power. The Company owns and operates a 400 MW Jaypee Vishnuprayag Hydro Electric Plant at District Chamoli, Uttarakhand; a 1,320 MW Jaypee Nigrie Supercritical Thermal Power Plant at Nigrie, Singrauli district, Madhya Pradesh, and a 500 MW Jaypee Bina Thermal Power Plant at Sirchopt village, Sagar district, Madhya Pradesh.The Company is engaged in operating Cement Grinding Unit at Nigrie, Singrauli district, Madhya Pradesh, and is also engaged in Captive coal mining operations at Amelia Coal Block for supply of Coal to Jaypee Nigrie Super Thermal Power Plant. The company through its subsidiary Jaypee Arunachal Power Limited is implementing two projects in Arunachal Pradesh, the 2700 MW Lower Siang & 500 MW Hirong. JPVL has also extended into implementation Agreement with Government of Meghalaya to set up 270 MW Umngot and 450 MW Kynshi Stage –II hydro power projects.The company has a good debt to equity ratio of 0.45 and the stock has already given 70% in the last 1 year.
Mishtann Foods LtdMishtann Foods is an agro-product company in India involved in manufacturing, processing & trading of rice, wheat, and other food grains with its preliminary focus on branded basmati rice. Company is planning to increase its presence on leading online grocery delivery platforms to further penetrate its product into urban pockets. The company has also signed a MOU with Government of Gujarat on 27th December, 2021, for the proposal of manufacturing of grain based ethanol. It has a fully automated processing plant located in Himatnagar, Gujarat which is an end-to-end rice processing facility. The company has given great returns with ROCE and ROE at 38.4% and 36.7% respectively. The company’s debt to equity stands at 0.33x times and the company’s operating margins have also increased significantly despite high inflation.
Vikas Lifecare LtdVikas Lifecare Ltd. is engaged in the business of trading and manufacturing of Polymer and Rubber compounds and Specialty Additives for Plastics, Synthetic & Natural Rubbers. The company has been conventionally engaged in various business segments including Polymer & Rubber Commodity (bulk consumption) Compounds and Master-Batches. Manufacturing Up-Cycled Compounds from industrial and post-consumer waste and scrap materials like EVA, PVC, PP, PE etc., directly contributing to the Environment Protection initiatives from the Government of India and fulfilling the mandated EPR obligations for the conglomerates using hundreds of thousands of tonnes of plastic products and packaging materials. As a long-term business strategy, the company has most recently diversified it’s business interests beyond raw materials (B2B businesses) and forayed into the B2C segment with a host of consumer products for FMCG, Agro, and Infrastructure Segments. It has a debt to equity ratio at 0.04 times and has seen a CAGR profit growth of 232% for the last 5 years. The stock has given a nearly 40% return over the past 1 year.
Facor Alloys LtdFACOR, incorporated in 1955, is one of the India's largest producers and exporters of Ferro Alloys, an essential ingredient for manufacture of Steel and Stainless Steel. It exports to several countries like Korea, Japan, Italy, Netherlands, USA, Turkey, China and Taiwan. The global ferroalloys market is expected to grow on account of rising steel production around the world. Nearly 85 to 90% of all the ferroalloys are used in the production of steel. Construction is the largest end-use industry of steel products. The construction sector around the world is projected to grow moderately from 2022 to 2030. This is expected to positively affect the demand for steel products and thus benefit the demand for ferroalloys, which are among the key feedstocks in the production of steel. Facor Alloys has given a 130% CAGR profit growth over the last 5 years. Despite being in a manufacturing space, its debt to equity is low at 0.08 times. However, replacement of stainless steel by carbon fibers is projected to restrain the market growth for ferroalloys market. Carbon fibers are widely being used in automotive industry due to their lightweight, high strength, and load-bearing properties. This causes a significant risk for Facor Alloys Ltd.
Vodafone Idea LtdVodafone Idea Limited is an Aditya Birla Group and Vodafone Group partnership. It is one of the India’s leading telecom service providers and it is the third largest wireless operator by subscribers in India. The Company provides pan India Voice and Data services across 2G, 3G and 4G platforms. Vi has a subscriber base of 245.62 million as of 31st October, 2022 and has lost net telecom subscribers for the 10th consecutive month of 2022. 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.
Watch our video on how to analyse and pick stocks below Rs 10 for investments
Model ultra-penny Stocks WatchlistIf 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 (19th Dec 2022)|
|1||Jaiprakash Power Ventures Limited||532627||JPPOWER||8.15|
|4||Radhe Developers (India)||531273||RADHEDE||8.25|
|5||Sadbhav Infrastructure Projects||539346||SADBHIN||6.25|
Best stocks below Rs 10 to buy now in India - Detailed overviewThe table below covers some of the most important factors while evaluating Best stocks below Rs 10 such as the return ratios – RoE, operating margins, sales and earnings growth, market cap, etc.
|Sr. No||Company Name||BSE Scrip Code||NSE Symbol||CMP (19th Dec 2022)||Rating||Industry||Price to Earnings (times)||Dividend Yield (%)||Return on Capital Employed (%)||Return on Equity (%)||Debt equity ratio (times)||Compounded Sales Growth [5 years (in %)]|
Compounded Profit Growth [5 years (in %)]
|1||Jaiprakash Power Ventures Limited||532627||JPPOWER||8.15||0.5||Electric Utilities||13.4||0||7.41||0.52||0.45||-0.14||15.8|
|2||Mishtann Foods||539594||MISHTANN||9.19||0.5||Other Agricultural Products||20.96||0.04||38.4||36.7||0.33||14.2||80.5|
|3||Vikas Lifecare||542655||VIKASLIFE||4.8||0.5||Comm.Trading & Distribution||23.39||0||25.39||21.05||0.04||24||232|
|4||Radhe Developers (India)||531273||RADHEDE||8.25||0.5||Realty||21.17||0||68.58||60.33||0.3||51.2||89.6|
|5||Sadbhav Infrastructure Projects||539346||SADBHIN||6.25||0.5||Roads & Highways||1.52||0||16.42||95.53||-||-6.52||19|
|6||Vodafone Idea||532822||IDEA||8.35||0.5||Telecom Services||-||0||-||-||-||1.6||-|
|7||Ruchi Infrastructure||509020||RUCHINFRA||10||0.5||Diversified Commercial Services||5.04||0||21.54||19.48||0.85||-26.1||51|
|8||Madhav Infra Projects||539894||MADHAVIPL||5.96||0.5||Construction & Engineering||22.07||0||10.6||5.68||1.59||2.92||-1.57|
|9||Gtl Infrastructure||532775||GTLINFRA||1.3||0.5||Telecom Equipment||-||0||-2.12||-||-||-8.52||-1.31|
|10||Facor Alloys||532656||FACORALL||7.97||0.5||Iron & Steel||9.22||0||17.55||12.39||0.08||14.2||130|
|11||Diligent Industries||531153||DILIGENT||9.72||0.5||Edible Oils||59||0||8.22||10.49||2.43||10.8||134|