Top 10 Penny Stocks in India: A Guide for Investors

Top Penny Stocks to Watch in 2024

Penny stocks often seem quite attractive due to their low prices. Although they do have growth potential, these stocks have certain inherent risks like high volatility. If you are a risk-aggressive investor with the ability to handle volatility, investing in some of the best penny stocks in India could be a good way to enhance the wealth-creation potential of your portfolio. Here are the top 10 penny stocks in India that you must watch out for in 2024, along with their key fundamental metrics.  

• PMC Fincorp Ltd.

With over 30 years of experience, PMC Fincorp Ltd. is one of the well-performing entities in the penny stocks list in India. The company provides loans and financial advisory services to micro, small, and medium enterprises (MSMEs). With a market capitalisation of about Rs. 274.51 crore, PMC Fincorp Ltd. features among the best penny stocks for intraday.  

The company’s consistent sales CAGR of 28.39% and an impressive PAT CAGR of 84.21%, over 3 years highlights its profitability and operational efficiency. These metrics position PMC Fincorp as one of the best penny stocks to buy for the long term in the finance sector.

• Kretto Syscon Ltd.

Among the top 10 penny stocks in India, Kretto Syscon Ltd. is one of the few to have highly diversified business lines. The company provides a wide range of services from real estate development and application development to software and IT solutions. 

Kretto Syscon’s P/E ratio of 16.04 and P/B value of 1.15 indicate a fairly valued stock with room for future gains, positioning it firmly on the good penny stocks list. The PAT CAGR of 28.85% over 3 years showcases improving profitability, making it a notable pick for best penny stocks to buy for the long term.

• Ajooni Biotech Ltd.

Ajooni Biotech, with its unique business proposition, stands out as one of the best penny stocks in India. The company is one of the fastest-rising entities in the animal feed and aquaculture industry. Ajooni Biotech’s fundamental performance looks promising, making it a good contender for the top 10 penny stocks in India.

The company’s 1-year price return of 101.64% reflects strong market interest, whereas a sales CAGR of 16.22% and a PAT CAGR of 79.60% serve as good indicators of consistent operational growth. For investors seeking the best penny stocks to buy now in India, Ajooni Biotech presents a compelling case, especially with its potential for scalability in rural markets.  

• Unishire Urban Infra Ltd.

Unishire Urban Infra Ltd., one of the key entities in the penny stocks list in India, operates in the hyper-competitive real estate and construction industry. Unlike its peers, the company strongly focuses on developing affordable and sustainable housing projects. 

Unishire Urban Infra, with a P/E ratio of 18.42 and a low P/B value of 0.42, offers a strong value proposition for investors looking for the best penny stocks to buy for the long term. A sales CAGR of 29% and PAT CAGR of 63.02% indicates robust financial performance, placing the company among the top 10 penny stocks in India. 

• Ashirwad Capital Ltd.

Another one of the top 10 penny stocks in India in the finance and investment space, Ashirwad Capital Ltd. specialises in portfolio management and investment advisory services. The company has a history of focusing on long-term investments in blue-chip companies, which is one of the reasons for its consistent operational performance, as evidenced by its 3-year sales CAGR of 38.40% and 3-year PAT CAGR of 39.08%.

The strong fundamental performance of Ashirwad Capital Ltd. makes it one of the best penny stocks to buy now in India for investors seeking exposure to the financial sector. If the company continues to focus on diversification and efficient capital allocation, it could very well make its way into the all-time best penny stocks in India list.

What are Penny Stocks?

Penny stocks are those stocks with share prices below 10 rupees. These stocks may seem affordable to purchase at the outset. However, they are marked by certain red flags like high risk and high volatility. Many companies in the penny stocks list in India may display poor trading liquidity too, if investors and traders show limited interest in these stocks. 

The best penny stocks in India, however, offer investors the opportunity to profit from future gains. They may add value to a diversified portfolio and potentially turn into multi-bagger stocks. The key is to perform in-depth research to identify the best penny stocks to buy for the long term. 

Samco Securities can be instrumental in these efforts — thanks to the extensive research tools and analytics made available to users of the Samco Trading App. If you want to curate your own good penny stocks list, open a Samco demat and trading account today to access all the trading tools and investment research from Samco Securities free of cost. 

What are the Key Features of Penny Stocks in India?

Penny stocks are marked by certain distinct features that set them apart from other types of shares in the stock market. These characteristics include:

• Limited Information

Penny stocks that struggle to attract investor attention may not be extensively analysed in the market. As a result, you may not have sufficient information available to you to make informed investment decisions. 

• Low Liquidity 

Companies in the penny stocks list in India may also display poor liquidity. This often stems from a lack of investor interest in such penny stocks. The downside to liquidity issues is that you may find it harder to buy or sell penny stocks at the desired time and price point.

• High Volatility

Many penny stocks may also be highly volatile. This high volatility in even the best penny stocks in India occurs because of high market sensitivity. Traders can leverage this aspect to find the best penny stocks for intraday trades. 

• Unpredictable Price Changes

A lack of adequate historical and company-related information makes it more challenging to predict the price patterns of companies in the penny stocks list in India. This is an important aspect to consider before you invest in the best penny stocks to buy for the long term.

Why Should You Invest in the Best Penny Stocks in India?

While their key features may be distinct from other established companies, penny stocks offer various investment and trading opportunities for savvy investors. Here are some unique benefits of choosing the best penny stocks for intraday trades or long-term investments:

• Low Entry Cost

One of the most appealing aspects of penny stock investments is the low investment cost. Due to their low price point, companies in the penny stocks list in India are highly affordable.

• High Potential for Growth

The best penny stocks to buy for the long term have a high potential to offer future gains. Some fundamentally strong penny stocks may even become multi-baggers over time.

• Leveraging Emerging Business 

Penny stocks help leverage investment opportunities in emerging sectors. For instance, choosing the top 10 EV penny stocks in India lets you tap into this segment’s growth.

• Intraday Trading Opportunities

With technical analysis using Samco’s advanced tools and insights, you can spot the best penny stocks for intraday trades and make the most of short-term volatility. 

What are the Risks Involved in Penny Stock Trading?

Before you shortlist the best penny stocks to buy now in India, ensure that you account for these key risks in penny stocks.

• Illiquid Markets

In illiquid penny stocks, you will find it challenging or even impossible to exit current positions at favourable prices. 

• Large Price Swings

Some companies in the penny stocks list in India may display large and unexpected price swings, which could affect your trading plans and profit targets adversely. 

• Poor Future Growth

If the penny stock you invest in does not grow as expected, your investments may not deliver competitive returns over time. In some cases, they may also lead to losses. 

Penny Stock Investments: What Red Flags to Watch Out For?

Although the top 10 penny stocks in India may prove to be less risky or more lucrative investments with time, not all penny stocks are safe. Most companies in this market segment are prone to some red flags like:

• Lack of Transparency

Many penny stocks belong to companies that may not have transparent or widely available information. These could be highly risky investments that are best avoided. 

• Pump-and-Dump Schemes

Sudden price increases in penny stocks may draw retail investors in, but they could be a sign of potential pump-and-dump schemes. 

• Risk of Delisting

Some companies in the penny stocks list in India may also face the risk of being delisted for reasons like bankruptcy, insufficient market capitalisation and the like. 

How to Maximise Returns with Penny Stocks?

Now that you know the red flags to avoid, let’s discuss how you can make the most of the best penny stocks to buy now India and maximise their potential returns. These strategies could help.

• Choose Fundamentally Strong Penny Stocks

Fundamentally strong penny stocks typically make for safer investments in comparison with other stocks in this market segment. Healthy financial ratios could make it easier for a company to ride out economic downturns, so your investments may not suffer significantly during bearish periods. You can find these companies by searching for debt-free penny stocks or high-ROE penny stocks.

• Focus on Sectoral Diversification

Sectoral diversification is also crucial to maximise your returns from penny stock investments. The trick is to focus on emerging sectors that show promise. For instance, you could allocate a part of your portfolio to the top 10 EV penny stocks in India or the best AI penny stocks. Getting an early entry into such companies helps you capitalise on their future growth. 

• Balance Your Short-Term and Long-Term Outlook

To make the most of these stocks, consider balancing the best penny stocks to buy for the long term with the best penny stocks for intraday trading. This way, you can benefit from long-term growth in some companies and intraday price fluctuations in others. It will also help you meet your current financial goals as well as build a corpus for your future financial targets. 

Final Words

To fund and invest in the best penny stocks in India, you must perform thorough research and evaluate risks carefully. By conducting the necessary due diligence, assessing the fundamentals of penny stock companies and monitoring market dynamics, you can make informed investment decisions.

Want to find the best penny stocks for your portfolio? Open a demat account on the Samco Mobile Trading Platform and log into the Samco Trading App for up-to-date insights on the best penny stocks in India.