Stocks to Buy below Rs 10

One of the fundamental strategies behind earning higher returns from stock investment is to invest when the stock is trading cheaply. Investors always look for stocks, that are undervalued, so that when the stock prices rise, they can generate higher returns. Here comes the penny stocks, which trade at a lower price often below Rs. 10.

These stocks are usually of small-scale companies, which are new in the market. These stocks under 10 are volatile but hold the potential for great returns. Investors who are into speculative investments and have a high-risk appetite usually opt for these stocks because if the bet goes right, they can churn out great returns, and the cost of investment is comparatively low as these stocks are under 10 rupees.

List of stocks to buy below Rs. 10

In this list of best stocks below 10 rs, the stocks are screened as per their five-year return. As you can see the five stocks below, all have current market prices under Rs. 10 but have offered a five-year return close to 100% and even more.

Overview of stocks below 10 Rupees

Let's see the details of these best stocks below Rs. 10–

• Standard Capital Market: It is a non-banking financial corporation, which was established in 1987 and has a current market capitalization of Rs. 282 crores. The stock has a price-to-earnings ratio of 28.5 and a five-year return of around 117%. Having said that, the promoter holder in this company is quite low and the return on equity has been low at 2.01% in the past three years. The current market price of the stock is Rs. 1.92 only.
• Prakash Steelage: As the name suggests, Prakash Steelage Ltd. is engaged in the manufacturing and export business of steel products, mainly pipes, and tubes. This company was incorporated in the year 1996 and has a current market capitalization of Rs. 156 crores. The P/E of the company stands at 6.79 and the current market price is Rs. 8.85 per share. The company has been successfully reducing its debt in the past few years and offered a 97.87% return in the past five years, and 124% in the past three years. However, its earnings include another income of Rs. 20.3 crores, which is not from the core business operations, and the promoters reduced their holdings in the company in the past three years by 14.7%.
• Siddha Ventures: The next stock below 10 that you can consider is Siddha Ventures, which is a broking house, dealing in investments, trading, and similar operations. It was started in 1991 and has Rs. 9.20 crores as market capitalization at present. Some of the pros of the company are that the company is almost debt-free, and it offered significant profit growth in the past five years. The return on equity also increased in the last three years significantly. However, the promoter holding in this company is very low which may be a reason for concern.
• Mid India Industries: This cotton and polyester yarn manufacturing company was established in the year 1991. Currently, it has a market capitalization of Rs. 11.8 crores at a CMP of Rs. 7.27. The company has offered around 84% return in the past five years; however, its three-year return stands at around 27%. The company has been successfully managing its debts and reduced its debtor days in recent times.
• Vandana Knitwear: The fifth best stock below 10 rupees is an apparel manufacturer and seller incorporated in 1995. The current market price of its stock is around Rs. 4.44 per share and the market capitalization stands at 47.5 crores. Even though the company has been generating profits, it did not pay any dividends in the past. It has offered a 5-year return of around 83.12% and a 3-year return of around 130%.

Why Should You Invest in Penny Stocks in 2024?

Investors are often skeptical about penny stocks, or stocks under 10, however, there are multiple reasons to include these stocks in one’s investment portfolio, especially if he or she is a risk taker and looking for higher returns.

• The first reason is the lower price of these stocks. As these stocks come within Rs. 10 so, you can buy a bulk of these stocks, and hold them until they reach the desired price, without feeling much pinch in your pockets. Even if the investment does not turn out to be fruitful, the loss will be minimal.
• The return potential on these stocks below 10 rs is significantly high as even a small positive turn in the business can help you gain a potential return. These stocks being dependable on the market movements, positive change in the market can bring out great results for the investors.
• Often these stocks help investors diversify their portfolio along with safe investment vehicles.
• For beginners, penny stocks can be great to start an investment journey. You can pay less for more number of stocks, and see whether the investment works for you or not.
• The best stocks below 10 rs are great investment opportunities for risk-takers in the investment arena, and people who are into speculative investments. If the right stocks are picked, then it can generate multi-bagger returns.

Things to keep in Mind Before Buying Stocks Under Rs. 10

There are three things, which you need to keep in mind when you are investing in shares under rs 10 –

• Very high volatility: The penny stocks are highly volatile. Therefore, you need to keep your calm while investing in them. Reckless or emotional decision-making can lead to losses. These stocks can be highly volatile, but you need to focus on the fundamentals, to check whether you should stay invested or exit the investment.
• Limited information: One of the major problems with these penny stocks is that the company information is not easily available or at times, not available at all. These are small companies, which do not have many resources and thus, availing information about these companies is quite a daunting task.
• Less liquid investment: Since, not many investors or traders are interested in these stocks below 10 rs thus; the liquidity quotient is low for these stocks. Therefore, it may be difficult to sell these stocks instantly.

Conclusion

If you are interested in speculative investing and can tolerate a high level of risk, then you can check and compare the best stocks under Rs. 10 mentioned above, however, make sure you trade or invest in them patiently and consider all the pros and cons.

FAQs on Stocks Under Rs. 10

1. How to invest 10 rupees?

You can even invest with Rs. 10 per share. Yes, that is possible with top penny stocks, which are trading at below Rs. 10 per share.

2.Are there risks with buying penny stocks?

Yes, there are risks as these stocks are of new and smaller companies, and highly volatile and reliable information about these companies is hard to find.

3.Which penny stock is profitable?

Penny stocks can be highly profitable if they move positively along with the market movement.