Investing in the stock market can be a lucrative way to grow your wealth, but with so many options, it cannot be easy to know where to start. For those with limited funds, investing in stocks under Rs. 20 can be a good option, as it provides an opportunity to purchase more significant shares and potentially increase your returns.
In 2023, several stocks are worth considering for investment based on their past performance and potential for growth. These stocks may include those in industries such as technology, healthcare, and consumer goods and companies with solid financials and a history of stability.
Of course, it’s essential to do your research and consult with a financial advisor before making any investment decisions. With a little effort, you can find the best stocks to invest under Rs. 20 in 2023 and potentially see a significant return on your investment.
Is it risky to Invest in stocks under Rs. 20?
Market conditions
Investing in stocks under Rs. 20 in 2023 depends on the market conditions. The stock market is volatile and subject to frequent fluctuations, and Stocks under Rs. 20 are even more prone to these fluctuations.
Company’s financials
It is essential to consider the financial stability and performance of the company before investing. Companies with poor financials and low market capitalization are more likely to be riskier investments.
Liquidity
Stocks under Rs. 20 may have lower liquidity, making it harder for investors to sell their holdings. This could result in a significant drop in the stock’s value, leading to losses for the investor.
Competition
Companies operating in highly competitive industries are more likely to struggle and face difficulties, making the stock a riskier investment.
Market trends
Understanding market trends and analysing the stock’s performance is crucial in determining its potential for growth. If the market trend is unfavourable for the store, it may not yield the desired returns.
Expert advice
It is always wise to seek professional financial advice before making investment decisions. An expert can provide valuable insights and help mitigate the risks associated with investing in stocks under Rs. 20.
Advantages of Investing in Stocks below Rs.20
Affordability
Stocks under Rs. 20 are relatively more affordable than high-priced stocks, making it easier for small investors to invest in the stock market.
Potential for High Returns
These stocks have the potential to deliver high returns if invested in the right company. As the share price is low, the growth potential is high.
Diversification
Investing in stocks under Rs. 20 allows small investors to diversify their portfolios, reducing their risk and increasing their chances of earning high returns.
Volatility
Lower-priced stocks are often more volatile, meaning their prices may fluctuate more rapidly than higher-priced ones. This can lead to a high return in a short period.
Growth Opportunities
Many companies under Rs. 20 are in their early stages of growth and have the potential for high growth in the future. Investing in these companies now can result in significant returns in the long term.
Less Competition
Since many investors are open to investing in low-priced stocks, there is less competition in this market segment. It allows small investors to take advantage of the opportunities in this segment before the market becomes crowded.
10 Best Stocks to Invest Under Rs. 20 in 2023
Suzlon Energy
Suzlon Energy is a leading renewable energy company headquartered in India. It was founded in 1995 and has since established itself as one of the largest wind energy companies in the world.
The company offers various services, including the design, manufacture, installation, and maintenance of wind turbines. Suzlon Energy has a global presence, with a network of offices and facilities spread across 19 countries. The company has a portfolio of over 15 GW of wind energy installations and has won numerous awards for its innovative solutions and commitment to sustainable energy.
The PE ratio for Suzlon Energy is currently at 6.86, indicating that the stock is highly undervalued compared to its peers. It had a Compounded Profit Growth of 6% and a Compounded Sales Growth of -11% over the past ten years. Its CMP is Rs 9.05.
Yes Bank
Yes Bank is a private sector bank in India, headquartered in Mumbai. It was established in 2004, and since then, it has provided its customers with a wide range of financial services and solutions.
The Bank has a network of over 1,000 branches and over 5,000 ATMs across the country. Yes Bank also offers a comprehensive range of financial products and services, including savings and current accounts, loans, credit cards, insurance, and wealth management services.
The PE ratio for Yes Bank is currently at 53.2, indicating that the stock is highly overvalued as compared to its peers. It had a Compounded Profit Growth of 1% and a Compounded Sales Growth of 12% over the past ten years. Its CMP is Rs 16.4.
Vikas Lifecare
Vikas Lifecare is a healthcare company providing quality healthcare services to its patients. They offer a wide range of medical services, such as general medicine, diagnostics, radiology, and more.
The company is committed to providing affordable and accessible healthcare, especially in rural and remote areas. With a team of experienced and skilled medical professionals, Vikas Lifecare ensures that patients receive the best care possible.
The PE ratio for Vikas Lifecare is currently at 17.1, indicating that the stock is fairly valued compared to its peers. It had a compound profit growth of 232% and a compound sales growth of 24% over the past five years. Its CMP is Rs 4.2.
Shyam Century Ferrous Ltd
Shyam Century Ferrous Ltd is an Indian steel company that was established in the year 1995. It is based in New Delhi and is known for producing a range of steel products, including sponge iron, pig iron, and billets.
The company is known for its high-quality steel products and strong presence in the domestic market. It has a state-of-the-art production facility that is equipped with modern machinery and equipment, ensuring that its products meet the highest standards of quality and consistency.
The PE ratio for Shyam Century Ferrous Ltd is currently at 10.1, indicating that the stock is fairly valued compared to its peers. It had a Compounded Profit Growth of 60% and a Compounded Sales Growth of 18% over the past five years. Its CMP is Rs 19.4.
Vodafone Idea
Vodafone Idea is an Indian telecommunications company formed in 2018 through the merger of Vodafone India and Idea Cellular. The company operates in all 22 telecom circles in India and provides services such as voice, data, and broadband.
Vodafone Idea has a customer base of over 400 million, making it one of the largest telecom operators in India. The company has been struggling to stay afloat in the highly competitive Indian telecom market, with mounting debt and declining revenue.
The PE ratio for Vodafone Idea is currently negative. Yet it is expected to give good results soon. It had a Compounded Sales Growth of 7% over the past ten years. Its CMP is Rs 6.85.
Triveni Enterprises
Triveni Enterprises is a leading company in the Indian market that provides innovative and high-quality products and services. The company offers a wide range of home appliances, electronics, and lifestyle products.
With a strong focus on customer satisfaction, Triveni Enterprises ensures that all its products are manufactured using the latest technology and are of the highest quality. The company has a highly dedicated and skilled workforce who work tirelessly to provide top-notch services to its customers.
The PE ratio for Triveni Enterprises is currently at 11.3, indicating that the stock is highly undervalued compared to its peers. It had a Compounded Profit Growth of 151% and a Compounded Sales Growth of 4% over the past five years. Its CMP is Rs 2.33.
Jaiprakash Power Ventures Ltd
Jaiprakash Power Ventures Ltd. is an Indian conglomerate that deals with hydro-power, cement, and construction activities. The company operates in multiple segments, such as Hydro Power Generation, Power Trading, Engineering Procurement and Construction, and Real Estate Development.
Jaiprakash Power Ventures Ltd. has several hydro-power plants in India and abroad, with a total installed capacity of over 2,700 MW. The company is committed to using sustainable energy sources to meet the growing energy needs of India and provides eco-friendly solutions to the industry.
The PE ratio for JP Ventures Ltd is currently at 11.1, indicating that the stock is fairly valued compared to its peers. It had a Compounded Profit Growth of -12% and a Compounded Sales Growth of 11% over the past five years. Its CMP is Rs 6.8.
Reliance Power
Reliance Power is a subsidiary of Reliance Infrastructure Limited, a leading Indian conglomerate. The company was established in 2007 and is one of India’s largest private-sector power generation companies. Reliance Power operates several power plants across the country with a total installed capacity of over 10,000 MW.
The company’s portfolio of power plants includes thermal, hydro, and renewable energy sources. Reliance Power is committed to providing affordable and reliable power to meet the country’s growing energy demands.
The PE ratio for Reliance Power is currently negative. Yet it is expected to give good results soon. It had a Compounded Sales Growth of 14% over the past ten years. Its CMP is Rs 11.8.
Orient Green Power Company Ltd
Orient Green Power Company Ltd is India’s leading renewable energy company, providing sustainable energy solutions through its wind and biomass power plants. The company was founded in 1996 and has since expanded to operate over 150 MW of wind and biomass power plants in India and other countries.
Orient Green is committed to providing clean energy and reducing carbon emissions, reflected in their focus on renewable energy sources.
The PE ratio for JP the company is currently at 30.2, indicating that the stock is relatively overvalued compared to its peers. It had a Compounded Profit Growth of 8% and a Compounded Sales Growth of 2% over the past ten years. Its CMP is Rs 9.
Rattan India Power Ltd
Rattan India Power Ltd is an Indian energy company specialising in developing and operating power plants. The company was established in 2010 and headquartered in New Delhi.
It is involved in generating and distributing electricity and provides clean energy to various regions across India. The company operates through its subsidiaries, including Rattanindia Nasik Power Ltd and Rattanindia Amravati Power Ltd.
The PE ratio for the company is currently negative. Yet it is expected to give good results soon. It had a Compounded Sales Growth of 19% over the past ten years. Its CMP is Rs 3.65.
Conclusion
In conclusion, investing in stocks under Rs. 20 in 2023 could be wise for investors looking for opportunities to grow their portfolios in the long term. With India’s economy expected to bounce back post-pandemic, there could be a lot of growth potential for stocks in various industries.
While there is no guarantee of success in stock market investing, it is essential to do thorough research and stay updated on market trends and company performance before investing. It is also advisable to have a well-diversified portfolio and not put all eggs in one basket.
However, investing in stocks under Rs. 20 could provide a higher chance of potential returns than investing in larger, well-established companies, and as always, consulting with a financial advisor before making any investment decisions is essential.