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Best Penny Stocks: Definition, Features, Types & Top List of Penny Shares

Best Penny Stocks: Definition, Features, Types & Top List of Penny Shares
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Penny stocks are low-priced, speculative stocks of small companies that trade at a relatively low volume. These stocks are usually priced under ₹10 in India and can be highly volatile.

Penny stocks carry inherent risks and are not suitable for most investors. Some of the risks associated with these stocks include susceptibility to pump and dump schemes, liquidity issues and stock manipulation.

That being said, penny shares have become slightly popular among investors in India, driven by their low stock prices. Many investors see buying penny shares for the long term as an opportunity to invest in small companies with high growth potential.

We think that investing in penny shares is inherently risky, and recommend investors do their due diligence and/or consult their financial advisor before investing in penny shares.

This blog will provide a comprehensive guide to Indian penny stocks 2024, including their definition, characteristics, benefits, risks, strategies & much more.

What are Penny Stocks?

Now that you know what penny stocks are, let’s understand how to trade in these low priced shares.

These stocks are traded on stock exchanges for less than ₹10.

In India, they must be purchased for at least ₹0.01. The NSE and the BSE are where these penny shares are traded in India.  These are commonly referred to as shares of firms with a market capitalization of less than ₹10 crores in India.

Investors often doubt Penny shares, but some have transformed into Multibaggers, including well-known names today. Multibagger stocks in India yield returns significantly surpassing their acquisition cost. Surprisingly, several giants like these started as Penny Shares.

To identify potential Multibaggers, keen observation is crucial. If you’re new to stock investing, thorough research is imperative before considering Penny Stocks 2024. It is important to note that multibagger penny stocks for 2024 are susceptible to the same risks associated with all low price shares (if not more), including price manipulation and liquidity issues.

Features of Penny Shares

Let’s understand the various features that can help you identify the best penny shares for your portfolio:

  • Low Liquidity: Penny stock is generally associated with small enterprises and moves sparingly, indicating a lack of market liquidity or buyers. As a result, because buyers are not always accessible, investors may find it challenging to sell a penny stock in an emergency.
  • Limited Historical Data: Some of the firms listed as penny shares in our low price share list 2024 may be brand new, while others may be in danger of going bankrupt. These companies generally don’t have any history at all or have a very bad history.
  • Highly Volatile: Penny stock often exhibits higher levels of volatility, which leads to greater potential for profit and, as a result, higher levels of risk.
  • Low Cost Per Share: Penny share prices in our low price share list 2024 are inexpensive to buy as compared to other shares.
  • High Risk: Penny shares are susceptible to pump-and-dump schemes, liquidity issues and stock price manipulation.

Top 10 Penny Stocks List 2024

As we’ve mentioned earlier, most penny shares or multibagger shares are not suitable for most investors due to their inherent risk of price manipulation, susceptibility to pump and dump schemes, and liquidity issues.

That being said, here’s a top 10 penny stocks list of for 2024 to watch out for: 

Stock NameMarket Cap (in Cr)Sub Sector5Y Historical Revenue GrowthNet Profit MarginShare Price
Sunshine Capital Ltd₹406.25-108.5022.59₹3.85
Standard Capital Markets Ltd₹301.35Consumer Finance88.1919.77₹1.98
G G Engineering Ltd₹263.11Auto Parts37.827.73₹1.97
Globe Textiles (India) Ltd₹123.94Textiles10.351.12₹4.00
Growington Ventures India Ltd₹121.06-54.596.13₹7.26
Aakash Exploration Services Ltd₹89.10Oil & Gas17.944.83₹8.65
Debock Industries Ltd₹84.06Agricultural & Farm Machinery52.738.78₹7.6
Kenvi Jewels Ltd₹78.86-38.010.61₹6.22
Gautam Gems Ltd₹53.93Precious Metals26.170.37₹9.69
Vivanta Industries Ltd₹50.00Pharmaceuticals111.255.24₹3.95
Disclaimer: Please note that the above list is for educational purposes only, and is not recommendatory. Please do your own research or consult your financial advisor before investing.

Note: The data in the penny stocks list is from 19th March, 2024. However, for real-time updates on stock prices and market trends, visit the smallcase stocks collection today!

with a potential for high returns
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with a potential for high returns

Types of Penny Stocks to Buy in India

Penny stocks to invest now in India can be classified into three types: turnaround, speculative, and growth stocks.

  • Turnaround Stocks: Stocks of companies that have a history of poor performance but are expected to recover.
  • Speculative Stocks: Stocks of companies with uncertain future prospects.
  • Growth Stocks: Stocks of companies that are expected to grow rapidly in the future.

Overview of the Top Penny Stocks

Here is a brief overview for all the the best penny stocks to buy 2024 in the top 10 penny shares list above, these stocks can be considered some of the best penny stock for long term investing in India in 2024:

Sunshine Capital Ltd

Sunshine Capital Ltd, incorporated on July 11, 1994, operates as a Non-Banking Finance Company registered with the Reserve Bank of India under Registration No. B-14.01266 dated September 25, 1998. Its core operations encompass financial services, including trading in shares and securities. It is one of the best penny stocks to buy now in India from our list. 

Standard Capital Markets Ltd

Standard Capital Markets operates as a Non-Banking Financial Company registered with the RBI. In 1995, it issued 20 lakh shares at Rs. 10 each, which were oversubscribed fourfold. Despite past challenges, the Board of Directors is currently striving to steer the company towards future success. It is also one of the best penny stocks to buy today India from our list!

As of March 19, 2024, Standard Capital Markets’ share price stands at Rs. 2.01. Over the last six months, it has risen by 27.22%, and over the past year, by 21.08%. The share’s 52-week low was Rs. 1.16, and the high was Rs. 3.52.

G G Engineering Ltd

G G Engineering Limited, established on January 23, 2006, operates a factory in Bharuch, Gujarat, specializing in assembling and selling electrical components. Additionally, the company engages in penny stock trading iron and steel metals sourced from Ghaziabad, Uttar Pradesh. Led by Mr. Vinod Beriwal and Mr. Kamal Beriwal, it caters to the growing demand for quality sheet metal and heavy steel products. It is also one of the most active low price stocks India on our list!

Globe Textiles (India) Ltd

Globe Textiles (India) Limited, established on October 4, 1995, in Ahmedabad, specializes in textile trading and manufacturing various garments and clothing accessories. Among its products are denim and printed fabric face masks, providing essential protection against dust and viruses. These masks are reusable and offer a snug fit. Additionally, the company offers face masks with hair bands for girls. Recognizing the importance of health, especially during the COVID-19 pandemic, the company also manufactures Personal Protective Equipment (PPE) suits. It is also one of the best multibagger penny stocks on our list of penny stocks in India!

Growington Ventures India Ltd

Growington Ventures India Ltd (formerly VMV Holidays Limited) operates under the Companies Act, 1956. Specializing in tours and travels, it offers air ticketing, hotel booking, car rental, tour packages, and related services. With a global operational scope, the company caters primarily to Indian clientele, offering both outbound and domestic packages. Over time, it has diversified its business, exploring new markets and expanding its presence. Growington Ventures holds significant partnerships within the travel and tourism sector. It is also one of the top multibagger penny stocks on our list. 

Aakash Exploration Services Ltd

Aakash Exploration Services Limited, originally named ‘Aakash Exploration Services Private Limited’, was incorporated on January 17, 2007. It began as a partnership firm called M/s. Aakash Roadlines in 2006, focused on transportation hire, technical services, and common carriers. This firm transitioned into a joint stock company and was renamed AESL on November 8, 2017. It is also one of the best penny stocks to buy right now on our list!

Debock Industries Ltd

Debock Sales and Marketing Limited began as “Debock Sales and Marketing Private Limited” in Jaipur on August 11, 2008. It transitioned to a public limited company and changed its name to Debock Sales and Marketing Limited on July 25, 2017. Jagdish Vishnoi and Subhash Chand were the original signatories to its Memorandum of Association. The company specializes in manufacturing agricultural equipment, including Tractor Trolleys, Agricultural Threshers, Ploughs, Tillers, Tankers, Combine Machines, Seed Drills, Harrows, Cultivators, and Chaff Cutters. It is also one of the best penny stocks to buy in 2024. 

Kenvi Jewels Ltd

Kenvi Jewels Limited began its journey as Suvarnkrupa Ornaments Private Limited in June 2013. The company changed its name to Kenvi Jewels Private Limited in August 2017, and shortly after, transitioned into a public limited company, renaming itself Kenvi Jewels Limited on August 24, 2017. Specializing in the manufacturing, retailing, wholesaling, and trading of jewellery, Kenvi Jewels offers a diverse range of products, including wedding jewellery, festive jewellery, rings, chains, earrings, and more, crafted from gold and adorned with diamonds, precious, and semi-precious stones. It is also one of the top penny stocks to buy for long term on our list. 

Gautam Gems Ltd

Gautam Gems Limited began its journey as “Gautam Gems Private Limited” on February 18, 2014. Later, it transitioned into a public company and rebranded as “Gautam Gems Limited” (GGL) on August 16, 2017. Based in Surat, India’s diamond hub, the company specializes in manufacturing and trading rough and polished diamonds. GGL offers a diverse range of diamonds in various categories, shapes, cuts, sizes, and colours. It is also one of the best penny stocks to buy today India for long term on our list. 

Vivanta Industries Ltd

On March 19, 2024, Vivanta Industries’ stock was priced at Rs. 3.95. Over the last six months, it dropped by 21.63%, but over the past year, it rose by 68.8%. The 52-week low and high for Vivanta Industries were Rs. 2.06 and Rs. 6.93, respectively. It is also one of the best penny stocks for long term on our list.

How to Invest in Penny Stocks?

Investing in the top 10 penny stocks in India can be appealing to some investors due to their low prices and potential for high volatility. However, it’s important to consider the risks involved when dealing with these types of securities.

One common way to invest in low priced stocks or highest dividend paying stocks is through traditional brokerage accounts. However, it’s crucial to exercise caution due to the liquidity issues often associated with these stocks in our top 10 low price stocks list.

Another approach is investing in these stocks in over-the-counter (OTC) markets and Pink sheets stocks, where these stocks are traded. These markets can offer opportunities, but they also lack the oversight and regulatory protections that come with more established exchanges.

For those who prefer a diversified approach, there are exchange-traded funds (ETFs) that focus on small-cap or micro-cap stocks, including energy shares. These ETFs can provide exposure to this segment, but it’s important to remember that the volatility and risk associated with even the best penny stocks in india for long term can still impact such investments.

How do Penny Stocks Work?

Penny stocks, which are shares of small companies publicly traded for less than ten cents each, operate differently from more established stocks. They often experience sudden market volatility, which can lead to significant gains for investors. However, due to limited liquidity and their small size, investing in these stocks carries inherent risk.

Multibagger Penny Stocks

Multibagger penny stocks are otherwise completely similar to penny stocks, except for the fact that these stocks may appreciate in value after one invests in them. Here is a list of the top five multibagger low priced stocks:

Stock NameChange (in %)Market Capitalisation (in Cr)Share Price
Paramount Communications Ltd-3.83₹2,759₹85.2
Rail Vikas Nigam Ltd-0.84₹55,086₹260
Bank of Maharashtra Ltd-0.85₹45,674₹63.85
Raymond Ltd2.10₹12,724₹1,943
SAL Steel Ltd0.00₹180₹20.05

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  2. They’re created and managed by SEBI-registered experts
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  4. Some of the popular smallcases among new investors are as follows:

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Top 100 Stocks smallcase by Windmill Capital

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Disclosures for aforementioned smallcases

Pros and Cons of Investing in Penny Stock Shares

Let’s have a look at the advantages and disadvantages of these pump and dump stocks: 

MetricProsCons
CostPenny stocks India are inexpensive to purchase, allowing investors to diversify their portfolios.Due to low trading volumes, penny stocks India can be difficult to sell quickly, leading to potential losses and liquidity issues.
CompanyPenny stocks 2024 are often associated with small companies that have the potential to grow rapidly.Information about even the top 100 penny stocks in India is often limited, making it difficult to make informed investment decisions.
RiskPenny stocks provide small businesses a way to access funding from the public.Even the best Penny stocks 2024 to buy today India for long term are often used in fraudulent schemes and are thus very risky.

Is Penny Stock a Good Investment?

Even low priced stocks have gained popularity among investors because they have the ability to generate rapid development in a short amount of time.

A lot of respectable companies deal in penny shares. They can have established management and teams, solid financial standing and improving ratios, increasing revenue, and ground-breaking goods or services that are prepared to rule an industry.

  • We are all familiar with the rush that comes with significant investing gains (and losses). Hunting, penny stocks trading, and penny stock investment are all fascinating and exciting.
  • A small amount can grow into considerably more! The bulk of penny stocks 2024 trading starts out with little sums. A person may only be able to buy three or four blue-chip stocks of companies with ₹1000 to trade but they may purchase thousands off of the best penny share list for the same sum of money.
  • Not all penny shares in the penny stocks list NSE see quick price changes. However, those who do frequently cause significant price changes in days as opposed to years.

Note: Due to their lack of liquidity, penny stock may be a risky investment. For instance, a list of low priced stocks are bought at a very low price and can give you the highest return. Some of these stocks fade away over time and may even be delisted, which would mean losses. Therefore, it is not necessary that investing in even the best penny stocks India would result in phenomenal returns.

How to Choose the Best Penny Stocks for Investments?

When seeking penny stocks, prioritize examining the company’s financial health and trading activity. Profitability and a strong balance sheet signal potential investment value. Assess trading volume to gauge market interest; low activity may indicate limited investor engagement.

Conduct thorough research by reviewing financial statements, recent press releases, and public information. Explore the company’s website and social media presence for insights. Understanding market volatility is crucial; utilize charting tools to track price fluctuations and identify optimal buying levels.

Set stop orders based on trading range analysis to mitigate losses. Beware of penny stocks with low trading volume, as they pose challenges for exiting positions swiftly. Ensure sufficient liquidity to avoid potential losses during sell-offs.

Who Should Invest in Penny Stocks?

Given its inherent highly risky nature, we think that most investors should not invest in potential multibagger penny stocks.

  • Penny companies seldom capitalise on the market, so their stock only trades occasionally. Investors who own these shares might employ a staggered purchasing or selling strategy to increase their holdings or reduce their holdings.
  • However, traders must take into account the higher risks they expose themselves to the highest return chances become available when investing in penny shares.

Common Mistakes to Avoid When Buying Penny Shares

When considering Indian penny stocks to buy today, it’s important to avoid common mistakes that can lead to losses. Here are some mistakes to avoid:

  • Falling for Hype: The best penny stocks to buy today in the penny stock market are often promoted through hype and speculation. Avoid falling for the hype and make informed investment decisions based on research and analysis.
  • Overtrading: Even the top 100 Penny stocks India trading is highly volatile, so it’s important to avoid overtrading. Stick to a trading plan and avoid impulsive trades.
  • Ignoring Risks: The penny shares are a highly risky investment, so it’s important to be aware of the risks and manage them effectively.

Tips for Investors Considering Penny Stocks

Before diving into penny stock investments, investors may consider the following practices to ensure a smoother investment experience:

  1. Conduct comprehensive research to pinpoint promising companies with strong fundamentals and growth potential. 
  2. Prioritise diversification to mitigate risk across your portfolio and employ stop-loss orders as a safeguard against substantial losses. 
  3. Stay cautious of hype and rumours, common in low priced stock markets, and invest only in disposable income. 
  4. Patience, coupled with a clear investment strategy, is paramount, as is readiness to glean insights from each trade. 
  5. Remember that penny stocks’ volatility renders them unsuitable for all investors; hence, assess your risk tolerance diligently.

To Wrap It Up…

In summary, best penny stocks for 2024 can be perceived as a lucrative investment opportunity, but for most investors, it is not the case. For most investors, sticking to reputed large-cap companies is advisable.

That being said, it is important that investors conduct thorough research, measure their risk appetite, and/or consult their financial advisor, in order to build a solid investment strategy.

As always, this article is for educational purposes only, and is not intended to be recommendatory.

FAQs

1. How can I invest in penny stocks?

1. Establish a brokerage account with a suitable penny stock-supporting stockbroker.
2. Conduct thorough research on penny shares to buy in 2024.
3. Choose promising one penny stock for purchase.
4. Execute your desired penny stocks to watch purchases by placing buy orders.

2. Is it a good time to invest in penny shares?

Penny stocks are some of the cheapest stocks in India and can offer highly risky investment options for short-term gains. However, if you’re willing to invest long-term, then look for other long-term investment instruments.

3. Can penny stocks be profitable for investors?

Is it possible? Yes. Is it likely? No. Even the best Penny stocks for 2024 in India are highly speculative and come with significant risks, including low liquidity, minimal regulatory oversight, and often questionable financials.

4. Is it profitable to invest in penny stocks?

Investors can profit from penny stocks, but they carry high risk. These stocks, with low trading frequency, are subject to sudden market volatility, which determines potential returns.

5. Which penny stocks are safe to invest in?

Penny stocks with the highest sales, profit growth (multibagger penny stocks), low pledges and a lower PE ratio than the industry standard, can be considered one of the safest options for penny stocks.

6. What is meant by penny stocks?

Penny stocks are traded on stock exchanges for less than ₹10. In India, they must be purchased for at least ₹0.01.

7. How can I identify penny stocks?

Penny stocks can typically be identified by their low share prices, i.e. below Rs 10.