Best penny stocks to buy in India in 2022

Apr 16, 2022

Level: Beginner

Reading time: 5 min

Investors are frequently counseled to use the “buy and forget” ideology to profit from long-term fund accumulation and not be alarmed by levels of short-term volatility. Investors typically like investing in blue-chip businesses that guarantee consistent capital gains and dividends to fulfill their financial goals.

However, they also can buy multibagger penny stocks, increasing returns in a shorter time while diversifying their portfolio for 2022. Next, we will find out what penny stocks are and which ones to buy in India today.

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What are penny stocks?

Penny stocks are available on the share market at meager costs. Some people speculate that equities with a price lower than Rs. 50 can be classified as penny stocks. They have low market capitalization and are usually illiquid.

Since traders often opt to speculate in penny stocks due to investors’ need for more information regarding penny stocks’ fundamentals, this leads to high volatility levels. However, despite the higher risks, penny stocks can produce enormous profits for their investors.

List of best penny stocks to buy today

Here is a selection of some of the best penny stocks to buy now in India:

Vodafone Idea;
Suzlon Energy;
Alok Industries;
Hemang Resources;
Indian Overseas Bank.

Let’s take a closer look at each of them.

Vodafone Idea

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Indian telecom provider Vodafone Idea, often known as Vi, was established by a collaboration between the Aditya Birla Group and the Vodafone Group. It offers voice and data services on 2G, 3G, 4G, and 4G+ platforms. At around Rs. 9.75, its ongoing trade price is nearer to its 52-week low cost of Rs. 7.75.

The price of Vodafone shares has increased by 12% over the past month and has created a return of more than 80% over the last three years. The government’s approval of converting Vi’s AGR-related dues into stock will likely strengthen its prospects even if the Vodafone stock price has had poor returns on a year-to-date basis due to worries about potential increases in losses.

Suzlon Energy

Suzlon Energy is a multinational Indian wind turbine manufacturer headquartered in Pune. Since 1995, Suzlon Energy has given its clients a vast portfolio that covers every kind of wind energy project.

The 52-week high and low stock prices for Suzlon shares, which are now trading below Rs. 10, are Rs. 13.10 and Rs. 5.90, respectively. The very speculative stock earned 21% during the previous month. The cost of Suzlon shares has grown by more than 40% in the previous year. Over the last three years, Suzlon has produced returns of almost 190%.

Alok Industries

Alok Industries, India’s leading completely integrated textile manufacturer, is yet another penny stock to buy today in India. Cotton and polyester are their areas of expertise.

At the moment, Alok Industries costs Rs. 20.30. The share price of Alok Industries reached a 52-week high of Rs. 35.80. This multibagger penny stock has produced an impressive gain of more than 745% during the last three years. In the previous month, the share price of Alok Industries increased by almost 4%.

Hemang Resources

This coal trader, who is based in Chennai, was first constituted as an NBFC. Hemang Resources has already been involved in the coal and infrastructure industries since 2015, when its certificate was revoked.

The return on the Hemang stock price in 2022 alone defies gravity at 1,264%. The share price of Hemang has increased by more than 930% in the last year.

Indian Overseas Bank (IOB)

Indian Overseas Bank (IOB), a nationalized bank run by the Ministry of Finance and headquartered in Tamil Nadu, was established in 1937. The government owns over 96% of the shares of IOB. Additionally, it has locations abroad in Bangkok, Colombo, Singapore, and Hong Kong.

Difference between capital and revenue expenditures

The IOB stock price surged over 9% in the previous month and increased to 14% above the last three months. The stock has performed consistently over the past three years, returning approximately 91%.

Overview of the best penny stocks to buy in India in 2022

Each of the five most extensive penny stocks has its offer. You might even consider which company’s offer you are more interested in. You can also review the top 10 penny stocks in India in 2022 for a more comprehensive list to browse and choose from.

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Factors to be considered

Although penny stocks have the potential to become multi-bagger stocks, this higher return potential comes with significant dangers. It would help to think about the following things before investing in penny stocks.

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Diversification

In general, penny stocks are erratic and scarce. Therefore, consider diversifying your holdings in several penny stocks rather than getting significant exposure to one particular penny company. In other words, assess how much of your portfolio would be allocated to extremely risky penny stocks before dividing this investment amount across other ones.

Cheap prices

Based on their pricing and fundamentals, make a list and eliminate penny shares. You should invest in penny stocks valued in their lower ranges to reduce losses and increase your possibilities of achieving profits.

Wrapping up

The list of the best penny stocks to buy in India shown above is merely illustrative and by no means complete. Your portfolio should be independent of penny stock investments. Instead, you should devote at most 2 to 3 percent of your investment too risky stocks.

The bottom line

This article highlighted the top 5 penny stocks in India and some information on how you could manage your portfolio effectively. But it contains educational advice and should not be taken as financial advice; please, research the market before investing.

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