Trending Stocks under Rs. 20 to Buy in India

Stocks priced under ₹ 20 are shares of small companies that have a very low price, usually below Rs. 20 per share. These are often called penny or small-cap stocks.
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Trending Stocks under Rs. 20 to Buy in India
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3 mins read
10-Aug-2024

The Indian stock market, currently brimming with growth potential, offers intriguing opportunities in stocks priced below ₹20. These often-overlooked stocks can be lucrative investments for savvy investors, especially retail investors with limited capital. By delving into their market capitalization and understanding the underlying factors, investors can identify promising stocks with the potential for significant returns. However, it's crucial to weigh the benefits against the risks, such as high volatility and liquidity concerns, before making informed investment decisions.

Leading 10 stocks under Rs. 20 in India

Here are the 10 popular Stocks Under Rs. 20 In India:

Name

Mar.Cap

Vodafone Idea Ltd

₹ 47,613.83

RattanIndia Power Ltd

₹ 8,672.72

Hathway Cable & Datacom

₹ 3,471.17

SALASAR TECHNO ENGG. LTD.

₹ 2,936.05

Unitech Ltd

₹ 3,084.61

GTL Infrastructure LTD

₹ 563.35

Dish TV India Ltd

₹ 2,688.23

Orient Green Power CO LTD

₹ 1,948.69

Rama Steel Tubes Ltd

₹ 2,209.70

Jaiprakash Power Ven. Ltd

₹ 13,583.56


Disclaimer: Please note that the above list is for educational purposes only, and is not recommendatory. Please do your own research or consult your financial advisor before investing.

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Overview of the leading stocks under Rs. 50 in India 2024

Here’s a list of the trending shares under Rs. 20 that you can consider adding to your investment portfolio.

  • Vodafone Idea
    A joint venture by Vodafone Group and Aditya Birla Group, Vodafone Idea is a telecommunications company that offers voice and data services to retail customers. Likewise, it renders enterprise solutions related to mobility, connectivity, security, Internet of Things (IoT), and cloud services to all kinds of commercial establishments and government organisations.
  • Rattan India Power Ltd:
    A renewable energy solutions provider, RattanIndia Power Ltd focuses on harnessing the power of nature to generate clean and sustainable electricity. Their projects include wind, solar, and hydro power plants, contributing to a greener future.
  • Hathway Cable & Datacom:
    Hathway Cable & Datacom offers a comprehensive suite of broadband internet and cable TV services to residential and commercial customers. With a focus on delivering high-speed connectivity and diverse entertainment options, Hathway aims to enhance the digital experience for its subscribers.
  • SALASAR TECHNO ENGG. LTD.:
    SALASAR TECHNO ENGG. LTD. specializes in providing engineering solutions for various industries, including power generation, transmission, and distribution. Their expertise in design, construction, and maintenance ensures efficient and reliable operation of critical infrastructure.
  • Unitech Ltd:
    Unitech Ltd is a diversified conglomerate with interests in real estate development, power generation, and infrastructure projects. They are committed to creating sustainable and innovative solutions that contribute to the growth and development of the nation.
  • GTL Infrastructure LTD:
    GTL Infrastructure LTD is a leading provider of telecom infrastructure services, offering tower and fiber solutions to mobile network operators and other service providers. Their focus on network optimization and expansion enables seamless connectivity for millions of users.
  • Dish TV India Ltd:
    Dish TV India Ltd is a leading direct-to-home (DTH) satellite television service provider, offering a wide range of entertainment channels to its subscribers. With a focus on delivering high-quality content and innovative features, Dish TV aims to enrich the viewing experience for its customers.
  • Orient Green Power CO LTD:
    Orient Green Power CO LTD is a renewable energy company focused on developing and operating wind and solar power projects. Their commitment to clean energy solutions contributes to a sustainable future and reduces reliance on fossil fuels.
  • Rama Steel Tubes Ltd:
    Rama Steel Tubes Ltd is a manufacturer of high-quality steel tubes and pipes used in various industries, including construction, agriculture, and automotive. Their focus on quality and innovation ensures that their products meet the diverse needs of their customers.
  • Jaiprakash Power Ven. Ltd:
    Jaiprakash Power Ven. Ltd is a power generation company with a focus on thermal power plants. Their commitment to reliable and efficient power generation ensures a stable supply of electricity to meet the growing energy demands of the nation.

Why invest in stocks under Rs. 20 in India?

  • Accessible entry point: Investing in stocks priced below Rs. 20 offers investors with limited capital an opportunity to build a diversified portfolio.
  • Growth potential: While characterised as small-cap or micro-cap, these equities may exhibit substantial growth prospects driven by market conditions and company-specific factors.
  • Portfolio diversification: Incorporating low-priced stocks into a broader investment strategy can serve as a risk mitigation tool while providing exposure to diverse sectors.
  • Long-term perspective: Investors with a long-term horizon and a tolerance for risk may benefit from the potential for compounded returns within this asset class.

What are the advantages of investing in stocks under Rs. 20?

Let us discover the advantages of investing in stocks under Rs. 20:

  • Growth potential: There is no denying that such stocks are notoriously inconsistent. Regardless, companies that project signs of success can land you lucrative returns. Even a slight jump in the stock price can lead to substantial gains on your investment.
  • Affordability: Penny stocks are economical. If investments in medium or big-cap shares are not possible due to budgetary restrictions, then penny stocks can be a feasible option to bolster your portfolio.
  • Market fluctuations: Changes in the seasons, market cycles, or trends can favourably impact the performance of penny stocks that are undervalued. Therefore, buying these stocks at cheap prices can be a good idea, especially if you are predicting a positive shift in market conditions.
  • Diversification: Because penny stocks are affordable, you can use them to diversify your portfolio. It gives you an opportunity to invest in firms across domains, thereby mitigating the general risk level of your portfolio.
  • Trading volume: Certain shares under Rs. 20 could exhibit high trading volumes, making them easier to sell. A demand for high trading volumes may also denote a stock’s improving performance and potential growth.

What are the disadvantages of investing in stocks under Rs. 20?

Let us explore the disadvantages of investing in stocks under Rs. 20:

Volatility

Penny stocks are often highly volatile compared to higher-priced shares. This factor is a double-edged sword, fostering opportunities and risks for you.

Low liquidity

Stocks with low-priced brackets often suffer from poor liquidity. This translates to low trading volumes, which makes them harder to sell. There is a high possibility of incurring losses if you decide to exit a position abruptly.

Inherent risks

Typically, shares under Rs. 20 are offered by small businesses that might lack the stability and credibility of big companies. Hence, investing in certain penny stocks will always carry a considerable amount of risk.

Inadequate information

Penny stocks might not be regularly covered by news agencies and financial experts. This can be inconvenient if you are looking for more detailed and authentic insights before entering any position.

Scams

Fraudulent parties or companies can engage in pump-and-dump manoeuvers, where penny stocks with very little or virtually no underlying value are sold to dupe unsuspecting investors. These bad investments can cause serious losses in the long run.

What considerations should you make before investing in shares under Rs. 20?

By now, you must be aware that investing in penny stocks can’t be an impulsive move. It has to be well-researched and reinforced by sound financial instincts. Be mindful of the following factors before you step onto the fickle turf of penny stocks.

Industry evaluation

The domain of a penny stock has a pivotal influence on its growth potential. So, go through the competition and industry trends to comprehend if the firm is a candidate for expansion and success.

Financials

While investing in a penny stock, carry out a personal audit of the company’s financial health. This includes checking its revenue, profit margins, and debt. Likewise, look at its leadership and business models to assess if it has what it takes to thrive in today’s competitive landscape.

Liquidity

As discussed earlier, stocks under Rs. 20 are afflicted by low liquidity. Ensure the penny stocks you are interested in hold decent liquidity levels so that you at least can buy or sell them at any time.

Diversification

To reduce your portfolio risk and increase the likelihood of gains, diversify by investing in penny stocks offered across segments and domains.

Closing thoughts

Low-cost stocks under Rs. 20 are a viable investment channel if you are a beginner or simply have limited funds to spare. But their volatile nature, coupled with inherent risks and vulnerability to scams, makes them a little less than desirable. However, if a penny stock has caught your attention, then the first order of business should be to run a background check on the company along with a thorough analysis of its financials, industry trends, and growth patterns.

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Frequently asked questions

Are Stocks Under Rs. 20 Safe Investments?

Stocks priced below Rs. 20 are often referred to as "penny stocks." While they might seem like a bargain, caution is advised. These stocks are often associated with high volatility, low liquidity, and potential risks. Due to their low price, they can be easily manipulated, leading to sudden price swings. It's crucial to conduct thorough research and understand the underlying fundamentals of the company before considering any investment in penny stocks.

How Do I Research Stocks Under Rs. 20?

Researching penny stocks requires a similar approach to any other stock investment. Start by examining the company's financial statements, including its balance sheet, income statement, and cash flow statement. Look for signs of financial stability, profitability, and debt levels. Additionally, analyze the company's business model, management team, and future growth prospects. Consider consulting with a financial advisor to get expert insights and guidance.

Can I Expect Significant Returns From Stocks Under Rs. 20?

While it's possible to achieve significant returns from penny stocks, it's not guaranteed. The potential for high returns also comes with high risks. Some penny stocks might experience rapid price appreciation due to positive news or market trends. However, others may plummet due to negative developments or lack of investor interest. It's important to have realistic expectations and be prepared for both potential gains and losses.

Should I Diversify My Investments In Stocks Under Rs. 20?

Diversification is a crucial investment strategy that helps spread risk across different assets. When investing in penny stocks, it's advisable to diversify your portfolio by investing in a mix of stocks from different sectors and industries. This can help mitigate the risk associated with any individual stock underperforming. However, it's important to note that diversification does not guarantee profits or protect against losses.

How Long Should I Hold Stocks Under Rs.20?

The ideal holding period for penny stocks depends on your investment goals and risk tolerance. Some investors might opt for a short-term trading strategy, aiming to profit from short-term price fluctuations. Others might prefer a long-term investment approach, holding the stocks for several years to benefit from potential long-term growth. It's important to have a clear investment plan and stick to it, regardless of market fluctuations.

How Long Should I Hold Stocks Under Rs. 20?

The ideal holding period for penny stocks depends on your investment goals and risk tolerance. Some investors might opt for a short-term trading strategy, aiming to profit from short-term price fluctuations. Others might prefer a long-term investment approach, holding the stocks for several years to benefit from potential long-term growth. It's important to have a clear investment plan and stick to it, regardless of market fluctuations.

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