Introduction

Investing in stocks priced under ₹200 can offer many opportunities, especially for new investors. These stocks often belong to companies with lower share prices, making them more accessible. This article explores five Indian stocks trading below ₹200 in 2024. In this blog, we will discuss their characteristics, investment advantages, and why they could fit your portfolio well.

Key Factors to Consider

When selecting stocks under ₹200, several factors are essential:

1. Affordability: Stocks priced below ₹200 are generally more accessible to new investors.

2. Dividend Yield: Focus on stocks that offer consistent dividend payouts, providing a steady income.

3. P/E Ratio: Look for stocks with lower Price-to-Earnings ratios, which might indicate undervaluation.

4. Return on Capital Employed (ROCE): Companies with high ROCE use their capital efficiently.

5 . Return on Equity (ROE): Strong ROE signifies effective management and profitability.

6. Debt-to-Equity Ratio: Ensures the company's debt levels are manageable.

Here are five stocks under ₹200 that are worth considering for investment in 2024:

*Data as of September 4, 2024. *

Disclaimer: The stocks in the list are solely for educational purposes. Before investing, please do your research or speak with a financial professional.

1.   Indian Oil Corporation Ltd

Indian Oil Corporation is a significant player in the oil and gas sector, handling tasks including fuel distribution, marketing, and refining. It also operates in energy-related activities.

Strengths:

• The company provides handsome dividends with a yield of 6.81%

• Achieved impressive growth in profit of 19.1% CAGR during the last five years.

• Average dividend with a consistent payout ratio of 42.6%.

  2.   Indian Railway Finance Corporation Ltd

This leasing and financing company for the Indian Railways. It assists in the development of railway infrastructure and rolling stock.

Strengths:

A reasonable dividend policy of 30.8% allows the payment of shareholders.​​​​​​​

3.   Housing & Urban Development Corporation Ltd

HUDCO provides registration and financial support for developing infrastructure projects, including building cities and accommodation. It also offers advisory services.

Strengths:

• This one has a reasonable dividend yield of 41.8%.​​​​​​​

4.   SJVN Ltd

SJVN is in the power generation and transmission business sector, with comprehensive coverage of hydropower, solar energy, and wind energy. The company is also engaged in consulting.

Strengths:

• A high dividend yield of 65.4% is paid out.

• Debtor days have reduced from 48.3 days to 23.6 days.​​​​​​​

5.   Union Bank of India

Union Bank of India is a leading public sector bank that deals in all types of banking, including savings, loans and investment facilities.

Strengths:

• Currently, it is trading at a very low p/b of 0.96.

• Core net profit increased at % Compound Annual Growth Rate of 46.4% in the last five years.

• Declare a moderate dividend payout of 22.9%.

Stocks that retail at prices below ₹200 have some advantages:

• Affordability: It is more convenient to buy stocks with lower rates for the price, especially since there are some levels of diversification for a small investment.

• High Growth Potential: These shares are usually offered for small or mid-cap companies with considerable growth potential.

• Lower Entry Barrier: This is the perfect option for beginning clients who want to enter the market but wish to avoid committing large amounts of money.

• Dividend Income: This type of revenue provides steady income plus potential growth through dividend-paying equities.

Who Should Invest in Stocks Under ₹ 200?

Stocks below ₹200 may be a strategic choice for numerous investors:

• New Investors: They provide an available access factor into the stock market.

• Diversifiers: Investors seeking to diversify their portfolios without significant capital outlay.

• Growth Seekers: Those interested in small-cap or mid-cap shares with excessive growth capacity.

• Dividend Seekers: Investors search for shares that offer regular dividend payments.

Conclusion

Investing in stocks priced below ₹200 could be brilliant if approached correctly. While these stocks frequently have lower share prices, they could provide good-sized increase potential and earnings possibilities. It’s crucial to conduct thorough research and recollect elements like affordability, dividend yield, and enterprise basics earlier than investing.

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By incorporating these shares into a properly rounded funding method, you can build a various portfolio with possibly significant returns.

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