Penny Stocks in India

Understanding Penny stocks

Penny stocks are also known as low-priced stocks. The exact meaning of penny stocks varies from country to country. For example, in the United States, penny stocks are defined as those that trade for less than $5, but in the United Kingdom, penny stocks are defined as those that trade for less than £1.

We call low priced stocks as "penny stocks"

First of all lets understand what is the meaning of the word penny. Read the definition of penny. A penny was a fraction of a pound, the currency of UK. It is similar to the Cent in America and the Paisa in India. So the stocks that were valued at under 1 pound or 1 dollar were known as "penny stocks". So the stocks trading in pennies were called penny stocks. But in modern times, some countries have increase the criteria, like in the US stock market, penny stocks are those stocks that have a share price under $5. Read here for more details.

Penny Stocks in India

In India, there is no set definition of "penny stocks", so there are different views on the price of penny stocks. Some think it is below 1 rupee or 10 rupees, while others think it is below 100 rupees.

So, What exactly are penny stocks

Basically Penny stocks can be defined as the microcap companies which have very small market capitalization. lets say 1000 cr. Or fairly we can say that the stocks which are between Rs. 10 and 100. We can find some good penny stocks in this price range.