Top Penny Stocks Under Rs 1: Many investors look forward to investing in penny stocks in the hopes of multi-bagger gains. As a bull market rages in an economic upcycle, many penny stocks rise from micro-cap to small-cap, resulting in multi-fold gains for the investors.
However, a quick search on Trade Brains Portal tells us that there are some 1,750 companies under the Rs 250 market cap. Where do we start? In this article, we’ll present you a list of such top penny stocks under Rs 1 which you can add to your watchlist.
What are penny stocks?
Penny stocks are companies with low share prices and small market capitalization. There is no strict range for defining a stock as a penny stock. Ideally, it is believed that a stock price under Rs 75 with a market capitalization of up to Rs 250 crore can be termed a penny stock.
Penny stocks have low liquidity and can display high volatility, moving as much as negative 10% or positive 10% in one single day.
Top Penny Stocks Under Rs 1
For our study of top penny stocks under Rs 1, we’ll brief ourselves on the business and key metrics of the stocks. So without further ado, let us jump in.
Top Penny Stocks Under Rs 1 #1 – Visagar Financial Services
|CMP||₹0.97||Market Cap (Cr.)||₹56.6|
|Promoter Holding||5.44%||Book Value||₹1.06|
|Debt to Equity||0.24||Price to Book Value||0.92|
|Net Profit Margin||2.7%||Operating Margin||-3.8%|
Established in 1994, Visagar Financial Services is a non-banking financial company (NBFC) in the investment and financial services industry. It is a part of the Visagar Group which has business interests in other sectors such as textiles, education, media and real estate.
The company’s primary business is investing in listed and unlisted securities of various companies. It holds a well-diversified portfolio of securities from multiple sectors: financial services, education, real estate, and more.
In addition to acting as an investment company, Visagar Financial Services also offers financial advisory, corporate advisory, and other related services such as debt financing, debt swapping, foreign currency financing, promoter PMS, etc.
Visagar Financial Services is a low-debt penny stock under Rs 1 with a market capitalisation of Rs 56.6 crore. Its book value per share is Rs 1.06 against the current market price of Rs 0.97 giving it a price-to-book value ratio of 0.92.
Top Penny Stocks Under Rs 1 #2 – ACI Infocom
|CMP||₹0.87||Market Cap (Cr.)||₹9.6|
|Promoter Holding||22.90%||Book Value||₹1.52|
|Debt to Equity||0.00||Price to Book Value||0.58|
|Net Profit Margin||18.9%||Operating Margin||26.5%|
ACI Infocom was started in 1982 as a manufacturer of floppy disks. It had technical collaboration with Shugart Associates of USA and is one of the oldest companies in India’s information technology sector.
The company saw a management change in 2012 when it was taken over by Prog Dyechem Private Limited. Since then, it has shifted its business focus to real estate. As of the present date, ACI Infocom provides consultancy services for small and medium-sized projects in the commercial and residential segments.
Furthermore, it is also involved in SRA projects, construction contracts, and redevelopment projects.
The real estate stock has a promoter shareholding of 22.90%. The company is debt free and has high net profit and operating profit margins of 18.9% and 26.5% respectively. It clocked a net profit of Rs 10 lakh on an income of Rs 53 lakh in FY23.
Top Penny Stocks Under Rs 1 #3 – Yamini Investments Company
|CMP||₹0.65||Market Cap (Cr.)||₹34.2|
|Promoter Holding||1.78%||Book Value||₹0.13|
|Debt to Equity||0.00||Price to Book Value||5.07|
|Net Profit Margin||4.9%||Operating Margin||-41.1%|
Headquartered in Delhi, India, Yamini Investments Company is a micro-cap company with a market valuation of Rs 34.2 crore. It is a penny stock with a share price of Rs 0.65. The company is engaged in the business of investing in shares, providing loans & advances and other services.
Proceeds from the sale of shares & other securities and interest earned make up the income of the company. It earned a net profit of Rs 21 lakh on revenues of Rs 4.33 crore for the financial year 2022-23.
Yamini Investments is a debt-free penny stock under Rs 1. It presently trades at a high price-to-earnings ratio and price-to-book value ratio of 163 and 5 respectively for a penny stock. On a cautionary note, it has a low promoter shareholding of 1.78% only.
Top Penny Stocks Under Rs 1 #4 – A R C Finance
|CMP||₹0.66||Market Cap (Cr.)||₹33.4|
|Promoter Holding||12.00%||Book Value||₹1.02|
|Debt to Equity||0.27||Price to Book Value||0.65|
|Net Profit Margin||4.8%||Operating Margin||26.4%|
ARC Finance was incorporated in 1982 as ARC Modellors & Services Ltd. Later in 1993, its name was changed to ARC Finance Ltd.
As of the present date, it is a registered non-deposit taking NBFC. ARC Finance is involved in the business of providing loans and investing/trading in securities.
ARC Finance has been profitable for the last four years. It earned a profit after tax of Rs 33 lakh on an operating income of Rs 6.92 crore in FY23. Throughout the period, the management of ARF Finance demonstrated superior sales and operating performance which translated into higher profitability.
The NBFC has a promoter shareholding of 12%. It has low debt on its balance sheet giving it a debt-to-equity ratio of 0.27. The stock presently trades at a high P/E of 101 giving the penny stock a market capitalization of Rs 33.4 crore.
Top Penny Stocks Under Rs 1 #5 – NCL Research and Financial Services
|CMP||₹0.39||Market Cap (Cr.)||₹41.7|
|Promoter Holding||0.00%||Book Value||₹1.16|
|Debt to Equity||0.00||Price to Book Value||0.33|
|Net Profit Margin||15.4%||Operating Margin||23.0%|
Founded in 1998, NCL Research and Financial Services is a non-deposit taking NBFC. It provides financial services to micro, small and medium enterprises (MSMEs), small and medium enterprises (SMEs), the corporate sector, and the non-corporate sector.
The company offers secured and unsecured financing options to its clients based on their risk profiles after taking into consideration their creditworthiness and repayment capacity. In addition to this, NCL also invests in multiple listed and unlisted companies.
It is a penny stock under Rs 1. NCL Research and Financial Services has a book value of Rs 1.16 per share giving it an attractive price-to-book value ratio of 0.33. The micro-cap company is debt-free and reported a net profit margin of 15.4% in FY23. The last two fiscals have been good for NCL as it clocked a profit after tax of Rs 1.04 crore and Rs 60 lakh in FY22 and FY23 respectively.
List of Top Penny Stocks Under Rs 1
The table below puts together the names of penny stocks under Rs 1 we covered above.
|Company Name||CMP||Market Cap (Cr)||Industry|
|Visagar Financial Services||₹0.97||₹56.60||Financial Services|
|ACI Infocom||₹0.87||₹9.61||Real Estate|
|Yamini Investment Company||₹0.65||₹34.20||Financial Services|
|A R C Finance||₹0.66||₹33.40||Financial Services|
|NCL Research and Financial Services||₹0.39||₹41.70||Financial Services|
Although penny stocks can make a great rags-to-riches story, investors must exercise extreme caution while putting money in such small companies. Penny stocks are risky because of the uncertain nature of their earnings and business models. In any negative event, the liquidity may evaporate leaving investors with unsellable stocks in their portfolio.
In addition to this, they can also be prone to pump-and-dump schemes where false price movement is created so investors buy into the stock while old investors make their exit profiting gains.
We noted above in our study of the top penny stocks under Rs 1 that most of the companies belong to the financial services sector. However, there is no clear distribution that the majority of micro-cap companies are in the same industry.
One may find penny stocks across different sectors: real estate, education, trading, retail, etc. Furthermore, interested investors can look beyond Rs 1 scrip and consider stocks trading at different price levels.
Do you think share price alone can be a determining factor for investing your money? What other factors should be considered? On top of that, what factors should one carefully consider for investing in penny stocks? How about we continue this conversation in the comments below?
Written By – Vikalp Mishra
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