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Best penny stocks for investing in India right now

equity market
Published Date: 07 Mar 2024Updated Date: 10 Jan 20256 mins readBy MOFSL
Penny Stock

Introduction

Penny stocks offer the exciting opportunity of earning significant returns with low investment amounts. They are available at a low stock price, which has made them slightly popular. However, they are susceptible to liquidity issues and stock manipulation. They also come with inherent risks, making them unsuitable for some investors. 

What are penny stocks?

Penny stocks are listed on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) at a price less than ₹10. Generally, they include stocks of companies with a market capitalisation of less than ₹10 crores in India. 

Many investors buy penny stocks due to their low prices and hold them long-term. The investment is perceived as an opportunity to gain from small companies with high growth potential. While penny stocks are inherently risky, they can transform into multi-baggers. Some of the most well-known brands of today started as penny stocks. 

If you’re considering investing in penny stocks, remember to do your due diligence, understand your risk tolerance, and consult a financial advisor to build a solid investment strategy. 

Top penny stocks to invest in February 2024

1. Vodafone Idea

Vodafone Idea is a renowned telecom service provider recognised for its comprehensive voice and data solutions across 2G, 3G, and 4G platforms. Its scope of services includes voice, broadband, and digital offerings. The company is versatile and caters to a diverse clientele. 

Read More: Penny Stock in India 2024

2. Suzlon Renewable Energy

Suzlon is a leader in renewable energy, especially wind power. It has overcome many financial challenges through restructuring. Suzlon is geared to capitalise on the country’s growth in renewable energy. It also aims to increase its global footprint and maintain a strong order book. 

3. Alok Industries

Alok Industries, from the textile world, has witnessed a turbulent journey with swings in financial performance. However, its recent trading activities and recognition in the textile industry indicate a potential for investors seeking to take higher risks related to penny stocks. 

4. Reliance Power

Reliance Power is a part of the Reliance Anil Dhirubhai Ambani Group (ADAG). It develops, constructs, and operates power projects in India and internationally. While it has struggled in the past, it has the potential to grow with India’s rising energy demand. 

5. Ansal Housing

Ansal Housing develops residential and commercial real estate properties. It has launched projects in Delhi, Ghaziabad, Meerut, Lucknow, and Mumbai. It also has over 26.8 million square feet under development. In 2024, the company’s shares rallied over 100% because of its removal from the Enhanced Surveillance Measure (ESM) list. 

6. Salasar Techno Engineering

Salasar Techno Engineering is a crucial player in the railways and power sectors. It has completed contracts for transmission lines, distribution lines, and sub-stations awarded by the Indian railways and many renowned power sector PSUs. 

7. Central Bank of India

Despite its struggles through many economic cycles, the Central Bank of India is a well-known public sector bank. Recently, it disclosed reductions in non-performing assets (NPAs) and improvements in net profit, indicating a turnaround in its financial health. It is an impressive penny stock in the banking sector. 

8. Morepan Laboratories

Morepan Laboratories manufactures and markets a wide range of active pharmaceutical ingredients (APIs). Its product portfolio also includes branded and generic formulations and home health products. It is known for its variety of APIs like Atorvastatin and Apixaban. It also offers innovative health devices, fulfilling a broad range of healthcare needs.  

9. Jammu and Kashmir Bank

J&K Bank operates as a universal bank in Jammu and Kashmir and a specialised bank in the other states of the country. With its team’s hard work and efforts, it has reported reductions in NPAs and an increase in profits. Its focus on a vast spectrum of financial services makes it a compelling penny stock in the banking sector. 

The bottom line

Investing in fundamentally strong penny stocks can be viewed as a lucrative investment opportunity. You can earn significant rewards after overcoming the inherent risks. Perform thorough research, measure your risk appetite, understand the market dynamics, and follow a disciplined investment approach for success. Penny stocks help you diversify your portfolio. But you must be cautious and make informed investing decisions to navigate the market ​​​​​​​volatility .

 

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Disclaimer: The stocks, companies, or financial instruments mentioned in this blog are for informational purposes only and should not be considered as investment recommendations. It is advised to consult with your financial advisor before making any investment decisions. Investment in securities markets are subject to market risks, read all the related documents carefully before investing. Investors are strongly encouraged to carefully read the risk disclosure documents prior to participating in market-related investments or trading activities. Due to the volatile nature of financial markets, no guarantees can be made regarding investment returns. Motilal Oswal Financial Services Ltd. does not offer any assured returns on market-linked securities. Please note that past performance of stocks or indices is not indicative of future results.
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