Penny Stocks 2025 - List of Best Penny Shares in India

Penny stocks are those that trade at low prices. Many investors want to buy more shares for less money. In 2025, penny stocks are again popular in India, because some small companies showed strong growth, and the market also supported small-cap recovery.

But, as some practical research has observed, penny stocks are risky. In this Blog, we’ll discuss how you can benefit from using smart investing and how you can avoid mistakes while trading penny stocks.

Quick Summary

Penny stocks are affordable stocks that trade under a small price range and have the potential to increase in value in the future, subject to future company performance.

Nevertheless, to identify penny stocks, be sure to do your research, considering the company business model is relatively stable and there are plans for future growth.

Our Focus in the Article

• What are penny Stocks and their key feature 

• Some of their factor to consider to investing using penny stocks

• Advantages and disadvantages of investing in penny stocks 

• How to invest in fundamentally strong penny stocks

What Are Penny Stocks?

Penny stocks are shares that trade at low prices, generally at ₹10, ₹20, or less. Since you can buy more units with your investment with a lower investment, penny stocks attract many smaller investors. 

Some penny stocks have extremely weak business and no real plan for a business, and as a result, they can fall fairly easily.

These are called fundamentally strong penny stocks, where the business is actually growing slowly, profits are improving, and the company has a real plan.

Overview of Penny Stocks in India

Penny Stocks are favored by retail investors in India because they believe it is easier to start with a low-priced stock. Many penny stocks are listed at a very low price and belong predominantly to small companies. 

Generally, penny stocks are often equities of small and emerging companies that carry risk and do not have operating businesses based on operations. 

However, a few of these penny stocks end up becoming multibagger penny stocks when a small company develops strong business momentum over time and the share price rises to materially higher levels.

The last few years have seen many small-cap and mid-cap companies in India improve their revenue, order book, and profit. Therefore, penny stocks always attract investor interest from new investors. 

List of Penny stocks in India

As we discussed, penny stocks are low-priced shares. Many investors want to find an easy, friendly penny stock list that helps to show more hidden growth opportunities. 

Some people even look for penny stocks to buy for the long term that happen at the same price, and give more profit in the future. 

For better smart investing, you can take an Idea for a penny stock list. Here top 10 penny stock list, which is described according to their parameter.  

Key Features of Penny Stocks

• Low Share Price: The most obvious feature is their price, usually under ₹10, though some traders consider stocks up to ₹50 as penny stocks.

• Low Market Capitalization: These companies typically have small market caps, often under ₹500 crores, indicating they're relatively small businesses.

• High Volatility: Penny stocks can swing dramatically in price – sometimes 20% or more in a single day. This creates both opportunities and risks.

• Low Trading Volume: Many penny stocks don't trade frequently, which means you might struggle to buy or sell when you want to.

• Limited Information: Unlike large companies, penny stocks often lack detailed analyst coverage, making research more challenging.

Things You Should Know About Penny Stocks

These are some of the facts that every investor must know before getting into the penny stocks:

• They're Not for Everyone

Penny stocks are stocks that appeal to risk takers and not those who are conservative and want to invest in stocks that yield reasonably stable returns. 

When you are a person who becomes nervous immediately seeing your investment change 10-15 percent in a day, penny stocks would keep you awake all night. 

These are appropriate to the investors who have surplus money they can afford to lose without compromising their finances or even their tranquillity.

• Price Manipulation Exists

Price manipulation is one of the greatest penny stock market threats. There is an artificial increase in prices by some operators at low trading volumes by organizing buying to give the perception of demand. 

This can also happen in semiconductor penny stocks in India, so investors should not trust a sudden price jump without checking the real company performance.

• Recovery Takes Time

When a penny stock goes down, it may take years before it is healed- if it is healed. Many penny stocks that go down never recover, unlike large-cap stocks that tend to recover following a market correction. 

It could be that the company is experiencing real issues in its business, the industries are demanding less, or the management is experiencing problems that take years to be solved.

There are also penny stocks that become value traps- this is cheap in terms of price, but the business is still rotten. Investors continue to hold on to the hope that they will recover, but this is not the case. 

• Hidden Gems Exist

Despite all the dangers, there are real undiscovered jewels in the penny stock area. 

They are small enterprises with a good business model, competent management, rising revenues, and good fundamentals that are yet to attract the attention of the market.

There are a few industries that would be of special interest in seeking potential multibaggers. As an example, semiconductor penny stocks in India have been the focus of attention as the country continues to drive to establish its own chip production ecosystem. 

• Regulatory Oversight

SEBI (Securities and Exchange Board of India) has been vigilant on the penny stocks to prevent fraud and manipulation of investors. 

They have also put in place some measures, such as the Additional Surveillance Measure (ASM) framework, whereby some stocks are subject to special surveillance due to price volatility or abnormal trading behavior.

• Your Money Can Be Kept Locked Away.

A lot of high book penny stocks are associated with low volumes of trading, i.e., few shares move on a day-to-day basis. This poses a grave situation when you desire to sell. 

Although the price may be appealing on the security screen, you may end up with no buyers who will want to pay you to purchase your shares. You basically lock in the money in the stock.

• Information Asymmetry

Big companies will have analyst coverage, frequent media coverage, and comprehensive investor presentations. None of this is usually the case with penny stocks. 

They may not update the company websites, be unable to access management, and the only source of information may be quarterly results.

• Tax Implications

It is important to note that capital gains tax applies to gains in penny stocks, just as it does to any other equity investment.

Gains that are held below a year are taxed at 20% and gains that are held beyond 125 lakh are taxed at 12.5%. These taxes should be factored into your returns.

Factors to Consider Before Investing in Penny Stocks

Penny stocks are investment products that should be carefully considered before investing. Penny stocks require more research as compared to existing companies, in which all the information is easily accessible.

These are the main criteria that you ought to consider before investing your money in any penny stock:

• Company Fundamentals

Review the balance sheet of the company, profit and loss accounts, and cash flow accounts of the company - all of which can be found on the BSE or NSE websites in the financial section of a company. 

Review of the revenue trend in the last three or five years. Growing revenue means there is a real business that is growing in demand. The factors of random or falling revenues are warning signs and indicate that the company has yet to find its fit in the market.

• Book Value Analysis

Book value is the amount at which a company can be valued, what would remain in case you sold all the assets and settled all the debts. High book value penny stocks can be an indication of a good opportunity.

In case a stock sells at ₹8, though the book value of the stock is 25 per share, then the stock is trading at way below its asset value. 

• Promoter Holding

Promoter holding percentage informs you about the level of faith the founders of the company have in their business. A high acquisition level, which is considered to be above 50%, shows that the promoters have confidence in the future of the company and are ready to keep their holding.

On the other hand, when promoters are constantly selling down their stock, this is a cause for concern. Promoters can also buy more shares, which is a good sign as they can see growth opportunities.

• Promoter Pledging

Determine whether there is a promise by promoters of their shares to secure loans. Promoter pledging (more than 50 percent of their holding) is an alarming signal.

It implies that promoters required money and pledged their company shares as collateral. 

In case the performance of the company worsens and the value of the share reduces, the lenders may sell these pledged shares, which will cause further decline in the price.

• Understanding of Business Model.

Be familiar with the products or services that the company has to offer, their customers, and their ways of earning money.

To illustrate this, a small firm producing traditional products may have difficulties, whereas a firm of similar size in renewable energy or digital products will have better growth opportunities because of the good winds in the industry.

Advantages of Investing in Penny Stocks

One benefit is that penny stocks are typically low-priced, so you can invest a small amount initially. 

You don't have to have budgets on the order of tens of thousands of dollars. If you have ₹2,000 or ₹5,000, in most cases you could buy 1 or 2 shares of the stock.

A second benefit is growth potential. If the company performs well in the future, its share price is likely to grow at a faster pace than larger caps. 

In penny stocks in India, some companies sometimes receive new orders or have government assistance, or the industry as a whole has improved.

So sometimes, when we make a favorable change, shares that are lower priced will offer a better return to the investor. 

Disadvantages / Risks of Investing in Penny Stocks

There is a high risk in penny stocks. The stock price is very low, so many of these companies are not a stabilizing business or constant growth. When something negative happens to the company, the stock price can drop very quickly.

Also, many penny stocks trade on low volume. This means it is possible to sell your shares when you want; sometimes, you might be stuck buying or selling your shares. 

Another problem is manipulation. Sometimes, unknown individuals can start spreading lies or bad news about a company to pump the price and scare many new investors. 

And remember, while some stocks look like high book value penny stocks, it does not mean they will be successful in the future. Book value will not protect you from losing money.

How to Find the Right Penny Stocks

When identifying penny stocks that could provide the best returns, the first thing to assess is the business quality. 

You should be able to clearly describe what the business is doing, its customers, and its business model for generating revenue. 

Next, check the basic financials. Is the business revenue or line of business trending positively? Is the profit quality getting better? Is the company keeping any debt under control?  

Finding the right penny stocks becomes easier by using a good stock screener. Our Dhanarthi stocks screener helps to provide you with data that you can easily predict before buying any share. 

If you want to analyze any penny stocks, use our Fundamental analysis report tool, which provides some necessary parameters which is used in stock investment 

Lastly, do not rely on social mediated tips or buzz. Use some reliable published industry documents and results publications, and research reports for judging real attraction.

How to Invest in Fundamentally Strong Penny Stocks

When you decide to invest in penny stocks, be careful. Do not buy just because the price is low. 

First, ensure the company has a stable business and improving financials. That is how you sift for fundamentally strong penny stocks.

You start with small research – review revenue growth, debt proportions, promoter holding, and the company's plans. When all these aspects are positive, that penny stock has better odds to grow in the long term.

Also, think long-term mindset. Penny stocks do not become big gainers overnight, but the stocks that are low in price today and have strong business quality can become multibagger penny stocks for 2025 or down the road.

Conclusion: Should You Invest in Penny Stocks?

Investing in penny stocks is feasible; however, it is available if done carefully. Penny stocks are cheap enough that a small investment can provide you with lower share purchases, but the risk is high. 

If you choose the right targeted company that warrants consideration and believability with business and growth potential, solid penny stocks can produce greater returns in the long term.

The method to know how to look at guarantees each time looking at the longer-term is to simply consider only a select group of trustworthy companies.

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