The market offers a wide variety of investment opportunities. One of these possibilities is penny stock, as an illustration. Penny stocks, as the name implies, are issued by little publicly traded businesses that are listed on stock markets. These are the relatively inexpensive stocks that can be purchased for less than Rs. 10, making them suited for novice investors.
The top penny stocks to purchase in India in 2023 are listed below :-
Although penny stocks have a little trading volume and little liquidity, they can be profitable if you sell them for more money. They are particularly well-liked by Indian small investors. Due to their restricted liquidity, they can’t, however, be suited for all investors.
Listed below are the 10 best penny stocks traded on stock exchanges in India:
Suzlon Energy Ltd.
South Indian Bank
Vodafone Idea Ltd.
Indian Overseas Bank
Morepen Laboratories Ltd.
Jammu & Kashmir Bank Ltd.
Bank of Maharashtra
Factors When to Consider Investing in Penny Stocks
Penny stocks are almost risk-free ways to try your luck in the stock market due to their cheap price. Before making an investment in these assets, a penny investor should take the following into account.
Penny stocks don’t have the same liquidity as major firms since they are publicly traded shares of tiny businesses. As a result, you might not always be able to sell things when you want to since there aren’t always purchasers.
High Return Potential
In India, compared to other assets like mutual funds and equity shares, penny stocks often offer returns on investment that are above average. However, to protect against potential danger brought on by the larger return possibilities of penny stocks, it is essential to conduct thorough research and diversify your portfolio.
Increased risk comes along with the possibility for larger profits when investing in penny stocks. Penny stocks are speculative and have a larger potential for both gains and losses. Consequently, you should start investing modest and raise it gradually over time.
On stock exchanges, penny stocks of listed firms are traded for less than Rs. 10 per share. You should group such equities according to their price and fundamentals before investing in them. To lessen the losses and increase your possibilities of achieving unanticipated gains, buy penny stocks that are priced at the low end of their ranges.
Avoid the buy and hold strategy
A buy-and-hold approach should be avoided when dealing with penny stocks. They have the capacity to produce rapid growth in a short amount of time. So, you may purchase them for brief periods of time and wait for them to mature before reinvesting. As a result, the danger level might be greatly decreased.
Since penny stocks are not commonly traded, the returns that investors may receive from them may be influenced by market volatility.
Can NRIs invest in penny stocks in India?
Yes, under the portfolio investment plan, NRIs can also buy and sell penny stocks of Indian firms on stock markets. They require a PIS account for repatriable investments through an NRE account. They may also invest in equities using money from an NRO account that is held in India.
How to trade in penny stocks?
To trade penny stocks, you require a Demat account. Using an online trading platform or app, you may begin trading penny stocks.
Can I make good returns by investing in penny stocks?
While compared to other assets, penny stocks tend to offer returns on investment that are above average, it is not a guarantee that you will always make money. These stocks are not often traded and might possibly lose all of their value. Investors’ prospective profits on them are influenced by market volatility.
Are penny stocks too risky to invest in?
Due to their minimal liquidity relative to other investments, penny stocks have the biggest risk. Since it is difficult to find buyers for penny stocks in an emergency, even if you purchase them at a low price. Some of these stocks eventually expire and may be delisted. Prior to investing in penny stocks, due diligence is required.