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Best Stocks to Buy Under Rs 500 in 2023

28 Nov 2023

Introduction

Investing in the stock market presents an excellent opportunity for gradual wealth-building, and sometimes, you don't even need a substantial budget to start. In 2023, you'll find numerous promising stocks priced below Rs 500. In this blog, we'll delve into the top five stocks in this range that you may want to consider adding to your investment portfolio.

Best Stocks to Buy Under Rs 500 in 2023

Bharat Electronics Ltd

Established in 1954, Bharat Electronics Ltd specializes in the manufacturing and provision of electronic equipment and systems for the defence sector. BEL is a diversified conglomerate offering a wide array of products and systems to India's armed forces. 

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They have expertise in Radars, Fire Control Systems, Missile Systems, Naval Systems, Anti Submarine Warfare Systems, Electro Optics, Tank Electronics & Gun Upgrades.

The company is almost debt-free. Additionally, it maintains a dividend payout of 45.4%.

NMDC Ltd

In 1958, the National Mineral Development Corporation (NMDC) was founded as a wholly government-owned entity operating under the Ministry of Steel. 

NMDC is involved in the exploration and extraction of iron ore, as well as the production and sale of sponge iron. They also generate and distribute wind power.

NMDC is a debt-free company with an impressive track record of return on equity (ROE),  of 27.9% over the past three years. They have consistently distributed a dividend payout of 38.9%.

Jupiter Wagons Ltd

Jupiter Group stands as a leading manufacturer of railway wagons, passenger coaches, wagon components, and castings in India. They are also a global manufacturer of advanced railway transportation equipment.

The company is anticipated to report a strong quarter, and it has achieved impressive profit growth with a 40.0% compound annual growth rate (CAGR) over the past five years.

Gujarat Mineral Development Corporation Ltd

Gujarat Mineral Development Corporation primarily operates in two sectors: mining and power. Their projects encompass Lignite, Bauxite, Fluorspar, Multi-Metal, Manganese, Power, Wind, and Solar.

The company extracts a variety of minerals and metals, including lignite, bauxite, fluorspar, manganese, silica sand, limestone, bentonite, and ball clay, from different districts in Gujarat, including Kutch, Surat, Baroda, Rajkot, Jamnagar, Porbandar, Amreli and Bhavnagar.

The stock offers an attractive dividend yield of 3.17%, and it has demonstrated solid profit growth with a 28.5% CAGR over the past five years.

WIPRO Ltd

Wipro Ltd is a global company specialising in information technology, consulting, and business process services (BPS). It ranks as the fourth-largest Indian player in the global IT services industry, following TCS, Infosys, and HCL Technologies.

With a longstanding track record spanning decades, Wipro has earned investors' trust and remains a popular choice for stocks priced under Rs. 500.

Key Factors Considered for Stock Selection:

Sustained Sales Growth: We prioritised companies that have demonstrated consistent sales growth over the past five years.

Strong Return on Equity: Our focus was on companies with a minimum return on equity (ROE) of 15% or higher. A higher ROE indicates a more favourable return for shareholders.

Promoter's Ownership: We prefer companies with promoters holding more than 50% of the company's shares. This marks a firm commitment from the company's founders or major stakeholders.

Favourable Debt to Equity Ratio: We looked for companies with a debt-to-equity ratio of less than 1, indicating a balanced and sustainable financial structure.

Bankruptcy Risk Assessment: To mitigate the risk of bankruptcy, we evaluated each company's Altman Z Score, ensuring it exceeded 3. This criterion provides added confidence in avoiding bankruptcy-related issues in the near future.

Conclusion

Investing in the stock market can be a rewarding way to grow your wealth, and you don't need a large budget to get started. The shares mentioned above are likely to grow and are available for less than Rs. 500 per share, making them accessible to a wide range of investors.

However, it should be noted that before you invest in any stock, you must conduct thorough research, consider your financial goals, and consult with a financial advisor if necessary. 

Diversifying your portfolio and adopting a long-term investment perspective are critical strategies for successful investing. In 2023, these stocks are worth considering as part of your investment journey.

 

Related Articles:  Best Stocks to Buy Under Rs 50 in 2023 | Best Real Estate Stocks to Buy in India 2023 Best Sugar Stocks to Buy In India 2023

 

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