Best Penny Stocks Under 1 Rs in September 2024 – 5yr CAGR Basis

Penny stocks, those trading at prices below ₹1, can attract investors’ attention due to their low pricing. Though these stocks are affordable, they come with many risks, including high volatility, low liquidity, and potential fraud. While there may be opportunities for significant returns, it’s essential to approach such investments with caution. In this article, find the best penny stocks in India below ₹1 in September 2024, based on the 5-yr CAGR and also understand the pros and cons of investing in them.

Best Penny Stocks Under 1 Rs in September 2024 – 5yr CAGR Basis

Note: The penny stocks list below ₹1 provided here is as of August 26, 2024. The stocks are sorted based on their 5-year CAGR.

Overview of Top 5 Penny Stocks Below ₹1 in September 2024

1. Global Capital Markets Ltd

Global Capital Markets is traditionally involved in investing in shares and securities and providing finance on a short-term and long-term basis. The company is registered with RBI as a Non-Banking Financial Company (NBFC). The company’s total income in FY 2024 was ₹119.908 lakh, a drop from ₹1,947.883 lakh in FY 2023. In FY 2024, the profit was ₹0.142 lakh, an increase from the loss of ₹9.737 lakh in FY 2023.

Key metrics:

• Return on equity (ROE): -0.36%

• Debt to Equity: 0.14%

2. NCL Research and Financial Services Ltd

NCL Research and Financial Services Ltd is a non-deposit-taking Non-Banking Financial Company. The company offers financial services with a main focus on Micro, Small, and Medium Enterprises (MSMEs), small and medium enterprises (SMEs), and corporate and non-corporate sectors. It also provides secured and unsecured loans based on clients’ risk profiles. The company’s total income in FY 2024 was ₹1,068.805 lakh, an increase from ₹390.549 lakh in FY 2023. In FY 2024, the profit was ₹161.066 lakh, an increase from ₹60.066 lakh in FY 2023.

Key metrics:

• Return on capital employed (ROCE): 1.55%
• ROE: 0.64%
• Debt to Equity: 0.00

3. Sawaca Business Machines Ltd

Sawaca Business Machines Ltd is an Ahmedabad-based company that is involved in the business of trading and exporting machinery and local trading of metal scrap and cotton bales. In FY 2024, the company’s total income was ₹758.31 lakh, an increase from ₹364.72 lakh in FY 2023. In FY 2024, the profit was ₹46.40 lakh, a drop from ₹54.57 lakh in FY 2023.

Key metrics:

• ROCE: 4.97%
• ROE: 4.28%
• Debt to Equity: 1.94%

4. Greencrest Financial Services Ltd

Greencrest Financial Services Ltd, previously known as M/s. Marigold Glass Industries Limited, is a registered non-deposit-taking NBFC and is involved in the business of NBFC activities, investing its surplus fund into shares and securities. In FY 2024, the company’s total income was ₹3,927.059 lakh, an increase from ₹2,448.715 lakh in FY 2023. In the financial year ended March 2024, the profit was ₹106.230 lakh, a drop from ₹125.562 lakh in FY 2023.

Key metrics:

• ROCE: 2.11%
• ROE: 2.01%
• Debt to Equity: 60.18%

5. Visagar Financial Services Ltd

Visagar Financial Services Ltd, incorporated as Inca Finlease Ltd, is engaged in financial and investment activities. In FY 2024, the company’s total income was ₹33,417.95, lakh, an increase from ₹5,180.05 lakh in FY 2023. In the financial year ended March 2024, the company reported a loss of ₹120.70 lakh, a drop from the profit of ₹127.87 lakh in FY 2023.

Key metrics:

• ROCE: -1.94%
• ROE: 3.47%
• Debt to Equity: 24.15%

What Are Penny Stocks Below ₹1?

Penny stocks below ₹1 are shares of companies that trade at very low prices, typically under ₹1 per share. These stocks are often from smaller and less established companies. They can be highly volatile. Due to their low price, penny stocks can attract investors looking for investment options with a small initial investment.

Benefits of Investing in Penny Stocks Below ₹1

• Low Entry Cost: Investing in penny stocks requires a minimal initial investment, making it accessible for small investors.
• Potential for High Returns: Due to their low price, these stocks can experience significant price increases, offering the potential for substantial profits if the company performs well.
• Opportunities in Emerging Markets: Some penny stocks belong to companies in emerging or niche markets that could grow significantly over time.

Risks of Investing in Penny Stocks Below ₹1

• High Volatility: Penny stocks can experience extreme price fluctuations, leading to a high risk of losses.
• Low Liquidity: Trading volumes for penny stocks are often low, which can make it difficult to buy or sell shares without affecting the stock price.
• Risk of Fraud: The low price and lack of oversight make penny stocks susceptible to manipulation and fraudulent schemes.
• Limited Information: Companies trading at such low prices may not have substantial financial disclosures or robust business operations, making it harder to assess their true value.

Conclusion

Investing in penny stocks below ₹1 can be enticing due to their low price and the potential for high returns. However, they come with significant risks, including volatility, low liquidity, and susceptibility to fraud. It is crucial for investors to thoroughly research and understand these risks before diving into penny stock investments. Talk to a financial advisor before making a decision.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.