Penny Stocks in India (2025)

Penny stocks refer to shares of smaller or lesser-known companies that usually trade at prices under ₹100. These firms often have low market capitalisation and may be emerging, financially weak, or in early growth stages.
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Penny Stocks in India (2025)
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3 mins
07-June-2025

Penny stocks in India refer to shares priced typically below ₹100, often under ₹50. These are issued by small or micro-cap companies with a market capitalisation of less than ₹1,000 crore. Due to their low liquidity, buying or selling them swiftly can be difficult, and their prices tend to be highly volatile. These companies are usually overlooked by institutional investors and analysts, and often lack transparency in financial disclosures. Read on to discover some of the notable penny stocks gaining attention in 2025.

List of Penny Stocks in 2025

Here is a list of popular penny stocks to buy today in 2025:

Penny Stocks

Penny Stocks

Market Cap

Indian Overseas Bank

78,085.47

Vodafone Idea Ltd

73,348.23

Yes Bank Ltd

65,418.71

UCO Bank

42,546.72

Central Bank of India Ltd

36,332.32

Punjab & Sind Bank

23,230.95

Ola Electric Mobility Ltd

20,612.86

Sagility India Ltd

17,999.71

Trident Ltd

15,672.71

NMDC Steel Ltd

11,238.87

Jaiprakash Power Ventures Ltd

10,547.47

Alok Industries Ltd

9,523.33

Ujjivan Small Finance Bank Ltd

8,420.12

PC Jeweller Ltd

8,061.41

South Indian Bank Ltd

7,712.90

Shree Renuka Sugars Ltd

6,996.35

Rattanindia Enterprises Ltd

6,567.16

Spicejet Ltd

6,120.01

RattanIndia Power Ltd

5,998.41

Hindustan Construction Company Ltd

5,962.12

Infibeam Avenues Ltd

5,920.96

Easy Trip Planners Ltd

3,887.86

Jayaswal Neco Industries Ltd

3,875.25

LS Industries Ltd

3,481.86

Sindhu Trade Links Ltd

3,436.96

Patel Engineering Ltd

3,306.63

Disclaimer: The market capitalisation values mentioned above are subject to change based on market conditions, company performance, and economic trends. For the latest and most accurate market capitalisation figures, please refer to official sources such as the SEBI or the respective stock exchanges.

Overview of the Penny Stocks in India

Penny stocks in India are low-priced shares, usually trading below ₹100, belonging to small or micro-cap companies. These stocks are known for high volatility, low liquidity, and limited public information. While they can offer substantial returns, they also carry significant risks. Investors should conduct thorough research before investing in such stocks.

1. Yes Bank Ltd
Yes Bank Ltd, once a prominent private-sector lender, has transformed into a popular penny stock following its financial and governance crisis in 2020. With strong backing from the State Bank of India and other institutional investors, the bank is undergoing restructuring to improve asset quality and operational efficiency. It trades at a low price but has significant market visibility, particularly among retail investors. The bank’s efforts to reduce NPAs, improve digital offerings, and expand its lending base are closely monitored. Although speculative, Yes Bank remains in focus due to its revival plans and the potential for long-term turnaround.

2. Vodafone Idea Ltd
Vodafone Idea Ltd is a major telecom operator in India that has become a penny stock due to persistent losses, debt burden, and intense competition from Jio and Airtel. Despite its large subscriber base, the company struggles with financial stability and AGR dues. Government support and proposed capital infusion have provided some relief, but its future hinges on successful fundraising and network expansion. Investors are drawn to Vodafone Idea’s potential revival, although the risks remain high. Its low stock price reflects current challenges, but any positive development in funding or tariff hikes could trigger renewed investor interest.

3. Trident Ltd
Trident Ltd is a diversified textile and paper manufacturer with global reach, known for its terry towels, yarns, and bed linen exports. Unlike many penny stocks, Trident has a profitable track record and strong export performance, especially in the U.S. and Europe. It benefits from government incentives under the PLI scheme and has consistently modernised its operations. The stock trades below ₹100, making it accessible to small investors, but its fundamentals remain stronger than typical penny stocks. Trident’s focus on sustainability, brand-building, and operational excellence makes it an attractive long-term bet for cautious investors seeking affordable entry points.

4. Sagility India Ltd
Sagility India Ltd, formerly a part of the HGS group, operates in the business process management (BPM) space, serving clients across healthcare, finance, and other verticals. It trades as a penny stock primarily due to low market recognition and limited institutional coverage. Despite this, the company has a steady service model, recurring revenues, and a focus on digital transformation. Its niche in healthcare BPO services gives it a stable revenue base. The low price attracts speculative interest, though liquidity concerns persist. For investors looking into undervalued tech-enabled services, Sagility may offer growth potential backed by industry relevance and outsourcing trends.

5. Reliance Power Ltd
Reliance Power Ltd, part of the Anil Ambani-led Reliance Group, once had ambitious plans in India’s power sector. However, project delays, high debt, and poor execution led to a significant erosion in market value, making it a penny stock. It currently focuses on reducing liabilities and reviving stalled projects. Despite minimal operational revenues, the company’s restructuring efforts and stake consolidation have kept investor interest alive. Occasional stock rallies occur based on speculative buying or group-level announcements. Although high-risk, Reliance Power holds long-term potential if it can manage its debt and unlock the value from its energy assets.

Features of penny stocks

Here are some features of penny stocks 2025:

1. Lack of liquidity:

Penny stocks frequently suffer from low liquidity, indicating infrequent trading activity with limited numbers of buyers and sellers. This lack of market activity not only complicates the process of selling shares when desired but can also result in substantial and unpredictable price swings.

2. Return potential and high risk:

Penny stocks present the potential for substantial returns, yet they simultaneously carry a high level of risk. It is imperative to recognise that not all penny shares will yield positive results, and some may experience a decline in value over time.

3. Multibagger opportunities:

Certain penny stocks hold the promise of becoming multibaggers, showcasing the potential to multiply in value several times over their initial price. Nevertheless, it is crucial to exercise caution, as this outcome is not guaranteed, and investing in penny shares demands careful consideration.

4. Pricing unpredictability:

Penny stocks frequently face sudden and unpredictable price fluctuations, posing a challenge for investors attempting to forecast their market behaviour. This volatility is influenced by various factors, including market dynamics, company-related news, and shifts in investor sentiment.

Additional read: How to Invest in US Stocks from India

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Factors to consider before investing in penny stocks

  • Financial health
    Assess the company’s financial position, focusing on profitability, debt levels, and cash flow. Debt-free penny stocks may suggest a relatively stronger and more stable balance sheet.
  • Management quality
    Examine the experience and track record of the leadership team. Strong, capable management is essential for overcoming challenges and fostering long-term growth in penny stocks.
  • Liquidity
    Penny stocks generally have low trading volumes, which can make buying or selling difficult without influencing the stock price. This illiquidity may hinder timely exits from positions.
  • Regulatory compliance and risks
    Verify that the company adheres to SEBI and stock exchange regulations. Non-compliance can raise red flags and affect the credibility of even dividend-paying penny stocks.
  • Volatility and risk
    Penny stocks, especially small-cap stocks in India, are known for their high volatility. Investors should be prepared for sharp price movements and potential financial losses.
  • Information availability
    Many low market capitalisation stocks lack detailed coverage. Investors must depend on publicly available financial statements and data from reliable sources for analysis.

Things you should know about penny stocks

1. Penny stocks are perfect for beginners

For new investors, penny stocks offer an ideal starting point. With their low prices, they allow beginners to experiment and learn trading firsthand without significant financial risk. This low initial investment helps limit potential losses.

2. Penny stocks can generate high returns

Despite common misconceptions, some penny stocks have substantial growth potential. By accurately identifying promising companies, investors can achieve significant returns. However, patience is required, as these investments may need to be held long-term to realise gains.

3. Penny stocks do not have an entry barrier

Trading penny stocks is accessible to almost anyone. They often move based on speculation rather than technical analysis, making them suitable for beginners. No certifications or advanced knowledge are needed; an internet connection and an online trading account suffice.

4. Penny stocks are generally low on liquidity

Due to their low market capitalisation, penny stocks are not frequently traded, making it difficult to find buyers or sellers. Holding these stocks long-term or using a staggered buying/selling approach can help mitigate liquidity issues.

How to trade penny stocks?

  • Conduct thorough research before investing in penny stocks, as these are often issued by lesser-known companies with limited analyst coverage. Reliable information may be scarce, so diligence is key.
  • Investigate the company’s business model, financial health, leadership quality, recent developments, and the overall industry it operates in to gauge its growth potential and risks.
  • Select a trading platform that provides access to over-the-counter (OTC) markets, where most penny stocks are listed rather than on major exchanges.
  • Ensure the platform offers necessary tracking tools, real-time data, and efficient trade execution to manage your investments effectively.
  • Review the platform’s fee structure, including commissions and transaction charges, as high fees can erode profits, particularly when trading in large volumes.

Advantages of investing in penny stocks

While penny stocks come with inherent risks, some investors are drawn to them for the potential advantages they offer. Here are a few advantages of investing in penny stocks:

  1. Potential for multifold growth
    Penny stocks have the ability to deliver substantial returns, even with small price movements. Since the initial investment is typically low, a modest rise in value can lead to impressive percentage gains. For investors willing to take calculated risks, these stocks can unlock high growth potential over time.
  2. Diversification opportunity
    Adding well-researched penny stocks to a diversified portfolio can enhance sectoral exposure, especially in emerging or niche markets. These stocks may belong to upcoming industries or undervalued segments, offering opportunities beyond mainstream investments. With careful selection, they can balance risk and add depth to long-term investment strategies.
  3. AccessibilityPenny stocks are affordable and accessible to new investors or those experimenting with market tactics. The low entry point reduces financial exposure, allowing individuals to learn and refine their investment approach. Losses are generally capped to the small amount invested, making them suitable for trial-and-error-based market participation.
  4. Portfolio diversificationIntroducing penny stocks into a broader investment mix can add an element of rapid growth, especially when the rest of the portfolio is skewed towards stable, low-risk assets. Allocating a small share to such high-risk, high-reward assets helps improve the return potential without jeopardising overall portfolio stability.

Disadvantages of investing in penny stocks

While penny stocks offer certain advantages, they also carry several drawbacks that investors must evaluate with caution:

1. High risk of loss:

Penny stocks are inherently risky. Due to their low liquidity and small market capitalisation, they are susceptible to price manipulation, fraud, and sudden declines. Investors may experience substantial losses, and some penny stocks may even become worthless.

2. Lack of information:

Small companies that issue penny stocks may not be as closely scrutinised or regulated as larger, more established companies. This lack of information can make it challenging for investors to conduct thorough research and assess the true value and potential risks associated with a particular penny stock.

3. Limited liquidity:

The illiquidity of penny stocks can be a significant drawback. It may be challenging to find buyers when you want to sell, and the bid-ask spread can be wide. This lack of liquidity can lead to difficulties in executing trades at desired prices.

4. Vulnerability to pump and dump schemes:

Penny stocks are sometimes targeted by unscrupulous individuals or groups engaging in pump and dump schemes. These schemes involve artificially inflating the stock price through false or misleading information, only for the perpetrators to sell their shares at the inflated price, leaving other investors with losses.

How to invest in fundamentally strong penny stocks

1. Conduct thorough research

Investigate the company's financial health, including its financial statements, management team, and operational efficiency.

2. Seek strong financial metrics

Look for penny stocks with consistent revenue growth, profitability, and a low debt-to-equity ratio.

3. Assess industry trends

Evaluate the industry’s trends and the company's growth potential before investing.

4. Prepare for volatility

Expect short-term fluctuations and consider holding your investments long-term for potential gains.

5. Implement risk management

Use stop-loss limits to manage the risks associated with penny stocks.

6. Diversify your portfolio

Invest in various stocks to reduce the risk of significant losses from adverse events.

7. Ensure liquidity

Choose stocks with sufficient liquidity and trading volume for easier transactions.

8. Stay informed

Keep up with relevant news and market trends that could affect the company or its industry.

Conclusion

In conclusion, while penny stocks offer the potential for high returns, they come with substantial risks that may not be suitable for all investors. It is crucial to conduct thorough research, be cautious of the inherent uncertainties, and consider consulting with financial professionals before delving into the world of penny shares investments.

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Frequently asked questions

Is penny stock legal in India?

Yes, penny stocks are legal in India. These stocks are traded on recognised exchanges like the BSE and NSE, or through authorised brokers in over-the-counter markets. However, due to their speculative nature and low regulatory coverage, SEBI closely monitors trading activities to curb manipulation and protect investors.

Is penny stock high risk?

Yes, penny stocks are considered high-risk investments. They are often highly volatile, lack liquidity, and are associated with limited financial disclosure. Due to their low market capitalisation and minimal analyst coverage, these stocks can be easily manipulated, making them a risky choice, especially for inexperienced investors.

Can penny stocks be profitable for investors?

Penny stocks can be profitable for investors, but they are also risky. They are not frequently traded stocks and often sudden bouts of market volatility determine the returns investors can potentially make on them. Being low on liquidity, penny stocks could be risky to invest in. While investing in penny stocks, investors must remember one has to be diligent in their research and invest their entire corpus in a diversified manner to hedge against potential risks that come with higher return prospects of penny stocks.

Is it a good time to invest in penny shares?

The decision to invest in penny shares depends on your investment goals, risk appetite, and trading strategy. Penny stocks are risky and volatile, and their returns are unpredictable. It is important to conduct thorough research before investing in penny stocks.

How to find penny stocks?

To identify penny stocks, use a stock screener to filter companies by share price, market capitalisation, and daily trading volume. After shortlisting, conduct in-depth research into each company's financial health, such as profitability, debt, and growth potential. Since penny stock investments are speculative, it’s wise to consult a financial advisor before investing.

What is a penny stock example?

Key characteristics of a penny stock in India might include:

  • Low stock price per share
  • Trading on a regional stock exchange or the over-the-counter market
  • High volatility and risk
  • Potential for significant gains or losses
How to buy penny stocks?

To buy penny stocks, select a brokerage platform that offers access to over-the-counter (OTC) or small-cap segments on Indian exchanges. While some brokers may limit penny stock trades or charge higher fees, many online platforms support them. Always check for liquidity, transaction charges, and stock availability before placing an order.

Should beginners invest in Penny Stocks?

Penny stocks are highly volatile and carry substantial risk, making them less suitable for beginners. New investors may struggle with market timing and risk management. It's advisable to begin with established stocks on exchanges like NSE or BSE. If still interested, thorough research and guidance from a financial advisor are essential.

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