Investors are sometimes counseled to adopt the “buy and forget” philosophy in order to profit from long-term wealth creation and not be alarmed by levels of short-term volatility. Investors typically like investments made in blue-chip companies that guarantee them consistent dividends and capital gains in order to fulfill their financial objectives. However, investors also have the choice to buy multibagger penny stocks, which increase returns quickly while also diversifying their portfolio.
In order to achieve this goal, we will now describe penny stocks and list some of the top penny stocks to buy in India in 2023.
What are Penny Stocks?
Stocks known as penny stocks typically trade for less than 50 rupees. They are typically illiquid and have a small market capitalisation. Smaller investors are less familiar with penny stocks. Because the information about their fundamentals and operations is either unreliable or unavailable, investors stay away from them. However, within a few trading sessions, penny stocks are renowned for producing multi-bagger gains.
Due to the illiquidity of penny stocks, occasionally only a small number of orders can cause the exchange to reach its circuit limit. When these equities are hitting upper circuits for several days, they typically offer bigger rewards. Typically, there are no trade volumes throughout this period of hitting circuits.
Sometimes there is a strong fundamental story that moves the stock up. Other times, it can just be a matter of stock operators manipulating the market. For the purpose of attracting inexperienced retail investors, they artificially raise the price and volume. They would sell their own holdings once there were enough traders trading in the stocks.
Because the majority of traders who purchase penny stocks don’t even care about them and plan to sell them as soon as they have generated decent returns. In India, penny stocks frequently don’t adhere to exchange regulations. Even their reporting lacks transparency.
List of Top Penny Stocks to Buy in India
Some of the top penny stocks to buy right now are listed below:
|S.No.||Best Penny Stocks in India 2023||Industry|
|1||Vodafone Idea Ltd||Telecom|
|3||Indian Overseas Bank||Banking|
|4||Yes Bank Ltd||Banking|
|5||Bank of Maharashtra Ltd||Banking|
|6||Dish TV India Ltd||Satellite Television|
|7||Jammu & Kashmir Bank Ltd||Banking|
|8||Morepen Laboratories Ltd||Pharmaceutical|
Overview of the Best Penny Stocks to Buy in India 2023
1> Vodafone Idea India Ltd
India-based Vodafone Idea Limited is a provider of telecom services. The Company operates a mobility and long-distance service business. On second-generation (2G), third-generation (3G), and fourth-generation (4G) platforms, it offers nationwide voice and data services.
It is usually viewed as one of the best penny stocks in India.
Vodafone’s company is actually suffering from competition from rivals like Reliance Jio and Airtel since it is gradually losing consumers to them. Despite being extremely risky, Vodafone can be on a speculator’s radar. Before purchasing this stock, volumes should be carefully monitored.
Small and medium businesses, start-ups, public sector organisations, and Indian and international multinationals can all benefit from the communication solutions offered by Vodafone Idea business services. Additionally, it provides broadband services, voice services, and digital and multimedia products.
2> Alok Industries
Alok Industries Limited is an India-based textile company that operates in the cotton and polyester industries. The company also produces leather, various garment products, and textiles, including activities related to mending and packing.
Spinning Division, Polyester Division, Home Textiles Division, and Apparel & Fabric Division are some of the company’s divisions. Accessories, apparel fabric, corrugated pallets, cotton & blended yarn, embroidery, woven and knitted clothing, home textiles, and polyesters are among the company’s products.
3> Indian Overseas Bank
IOB, a nationalized bank run by the Ministry of Finance and headquartered in Tamil Nadu, was established in 1937. Over 96% of the shares of IOB are owned by the government. Additionally, it has locations abroad in Bangkok, Colombo, Singapore, and Hong Kong.
Indian Overseas Bank does banking business. Treasury, Corporate/Wholesale Banking, Retail Banking, and Other Banking Operations are among the Bank’s segments.
Its operations include retail banking, which includes Arogya Mahila Savings Bank Accounts, mid-corporate department, agricultural credit portfolio, loans to small and marginal farmers, loans to non-corporate farmers, and microfinance. It also includes domestic deposits, domestic advances, foreign exchange operations, investments, and micro, small, and medium enterprises.
4> Yes Bank Ltd
YES BANK Limited is a private-sector bank with its headquarters in India. It offers banking services such as corporate and institutional banking, financial markets, investment banking, corporate finance, branch banking, business and transaction banking, and wealth management. Treasury, Corporate Banking, Retail Banking, and Other Banking Operations are among its segments.
Both the Bombay Stock Exchange and the National Stock Exchange of India list Yes Bank’s stocks, while the London Stock Exchange lists its bonds. Following its initial public offering (IPO) in June 2005 with a face value of 10 and an issue price of 35, Yes Bank was listed on the Indian stock exchanges.
5> Bank of Maharashtra Ltd
Banking services are offered by The Bank of Maharashtra Limited. Treasury, Corporate/Wholesale Banking, Retail Banking, and Other Banking Activities are the Bank’s segments.
Investments, balances with banks outside of India, interest accumulated on assets, and related revenue are all included in the Treasury category. All loans made to trusts, partnership businesses, corporations, and statutory organisations fall under the corporate/wholesale banking segment. Exposure to an individual as well as a small business is part of the retail banking segment.
6> Dish TV India Ltd
With Yes Bank as its largest shareholder, DishTV India is an Indian satellite television company with headquarters in Noida, Uttar Pradesh. The Zee Group introduced DishTV on October 2, 2003. On the list of media companies in the Fortune India 500 ranking of India’s largest corporations in 2011, it was rated #437 and #5. According to Trust Research Advisory’s Brand Trust Report 2014 study, Dish TV was also chosen as India’s most trustworthy DTH provider. The largest DTH provider in India at the time of the merger was created after Dish TV and Videocon d2h successfully concluded their merger on March 22.
7> Jammu & Kashmir Bank Ltd
Jammu and Kashmir Bank Limited operate in the banking industry. Loans, personal accounts, term deposits, insurance, cards, business accounts, agricultural loans, mutual funds, and non-resident banking are just a few of the goods and services the Bank provides.
Treasury, Corporate/wholesale banking, Retail banking, and other banking operations are among its main segments. Additionally, it offers loans for things like residential loans, consumer loans, student loans, commercial vehicle loans, and term loans for agriculture.
8> Morepen Laboratories Ltd
The business of manufacturing, producing, developing, and marketing a wide range of branded and generic formulations, as well as Home Health products, is carried out by Morepen Laboratories Ltd. The business is a well-known participant in the domestic and internal API marketplaces. It has a niche portfolio with the most significant capacity in the world for 4 APIs. It serves more than 800 consumers worldwide, with the majority coming from Asia and India.
Factors To Consider Before Investing in Penny Stocks India
Because penny stocks have such tremendous volatility, investing in them can be quite beneficial. However, a penny stock investor must tread cautiously when making such investments by considering the following factors:
In general, penny stocks are volatile and illiquid. Therefore, you should think about diversifying your holdings in several penny stocks rather than getting a significant exposure to one particular penny stock.
In other words, decide how much of your portfolio will be allocated to extremely risky penny stocks before dividing this investment amount across other penny stocks.
b> High Risk:
The riskiest investments in India are penny stocks. This is due to the fact that they are speculative and can result in greater gains or losses. Therefore, it is advised to start small and gradually raise your investment as you go along if you are interested in penny stocks.
c> Low Pricing:
On the basis of their pricing and fundamentals, select penny stocks. To reduce losses and increase your possibilities of achieving windfall gains, you should invest in penny stocks that are priced in their lower ranges.
d> Avoid the Buy and Hold Approach:
You are advised to avoid using the buy-and-hold strategy while investing in penny stocks. Instead, try investing in them for brief periods of time and waiting for them to mature before reinvesting. Your risk levels will considerably drop as a result.
e> Company Fundamentals:
Considering the company’s foundations before investing in its stock is crucial. The fundamentals of any particular company include things like its market capitalization, net sales, shareholding structure, cash flow from activities, management, etc. You can see growth potential in a company’s penny stock and decide to invest in it if all these factors are positive.
In India, penny stocks are a long-term investment that strives to offer any investor the lowest risk and maximum return possible. Penny stocks are reasonable, cheap shares that the company issue. Because their prices are less volatile, penny stocks tend to be more attractive to many investors.
Disclaimer:The information provided in this blog is for informational purposes only and should not be construed as financial advice. Before making any investment decisions, it is recommended that you seek advice from a professional financial advisor.