Stocks Under 5 Rs

Why Consider Investing in Stocks Under ₹5?

Investments in stocks below 5 Rs serve mostly to investors who wish to have a low entry point into the equity market. The main advantages are that the investment requirements are low, as thousands of shares are available with very minimal capital outlay; there is a chance of high returns in case the company experiences turnaround or industry turnaround, and an individual can learn the mechanics of the stock market through the knowledge of how the price moves and how the procedures of the exchange work in a real-market environment. Such stocks often belong to sectors with growth potential or companies seeking to improve their fundamentals. Nevertheless, due to the low cost, they are volatile, illiquid and subject to manipulation and are only best suited to investors with a large risk-taking ability and a common objective of making a lot of money by investing small amounts of capital.

Top 10 Stocks Under ₹5 by Market Cap (2025)

The 10 best stocks below ₹5 in terms of market capitalisation in 2025 are listed below to give an investor an overview of affordable shares with a large market share:

GTL Infrastructure Ltd

• About the Company: A leading telecom infrastructure provider, specialising in wireless towers across India.
• Why Buy: Well placed to take advantage of the growth of the Indian telecom industry and infrastructure investments.
• Considerations: The profitability would be strained by high debt levels and regulatory risks in the sector.

Dish TV India Ltd

• About the Company: The leading direct-to-home (DTH) television service operator in India.
• Why Buy: The increase in subscribers and expansion of digital content will help in increasing future revenue streams.
• Considerations: There is potential reduction of market share due to increased competition by OTT platforms.

Jaiprakash Associates Ltd

• About the Company: A diversified infrastructure player engaged in construction, cement, and real estate.
• Why Buy: Potential recovery via ongoing projects and increasing infrastructure spending.
• Considerations: Stretched balance sheet, and delays in the execution of the project are still a concern.

GVK Power & Infrastructure

• About the Company: Power plants, airports and transport infrastructure developer and operator.
• Why Buy: Long-term value can be improved with the help of strategic assets and government initiatives.
• Considerations: Debt burden and legal hurdles can affect operational performance.

Davangere Sugar Co Ltd

About the Company: Sugar manufacturing and renewable energy production company based in Karnataka.

• Why Buy: It has the advantage of government policies that favor the blending of ethanol and renewable energy.
• Considerations: Seasonal and monsoon dependency impact raw material availability and margins.

Sunshine Capital Ltd

• About the Company: It is a diversified financial services company that deals with lending and investing.
• Why Buy: Good valuation and possibility of financial performance recovery.
• Considerations: Scale and market presence are limited and this increases operational risks.

Amraworld Agrico Ltd

• About the Company: Commodity trading company that deals mainly in agricultural products.
• Why Buy: Commodity price cycles expose the company to potential gains in case of favourable market conditions.
• Considerations: The company is very sensitive to the volatility of commodity prices and regulatory changes.

Ashirwad Capital Ltd

• About the Company: Financial services firm that deals in lending and capital markets.
• Why Buy: Recovery in credit growth and the improvement in the quality of assets enhances growth prospects.
• Consideration: Competition in the NBFC arena and regulatory risks are to be monitored.

Biogen Pharmachem Industries

• About the Company: Biotechnology firm specialising in pharmaceutical intermediates and ingredients.
• Why Buy: Growth potential with increasing focus on biotechnology and pharma exports.
• Considerations: Current losses and sector volatility make this suitable for risk-tolerant investors.

Fedders Electric & Engg Ltd

• About the Company:Electricity transmission and distribution equipment manufacturer.
• Why Buy: Consistent order book due to the growth of infrastructure projects.
• Considerations: Pressure on profit margins; the company should strive to enhance its operational efficiency.

How to Buy & Invest in Stocks Under ₹5 via Kotak Securities

To invest in stocks of less than 5 using Kotak Securities, do the following steps:

• Open Demat and Trading Account: Complete the KYC proces online through Kotak Securities.
• Use Stock Screeners: Use the Stock Screeners offered by Kotak, and search using terms like stocks under 5 Rs or best stocks under 5 to create lists of low-cost stocks.
• Evaluate Key Metrics: Analyse price to earnings ratio (P/E), price to book ratio (P/B), trading volumes, promoter holdings, and recent company announcements.
• Place Buy Orders: To reduce the risk, make small buy orders, and over time, the average buying price will be achieved through diversification.
• Periodic Review Holdings: It is not high risk, so it is important to constantly track the stock performance and market news and make adjustments.

Kotak Securities simplifies penny stock investment tools by providing intuitive features that offer timely alerts and allow users to transact easily to take advantage of market opportunities.

Major Risks of Buying Stocks Below ₹5

Investments in stocks under ₹5 inherently carry several risks:

• Illiquidity: The low trading volumes can trap investors because it becomes tricky to get out of the positions without influencing the market price particularly when the market is slumping.
• Delisting Risk: Stocks priced below ₹5 often face a higher delisting risk if they fail minimum compliance, like public shareholding norms or financial performance criteria on exchanges.
• Extremely High Volatility: Stocks under this category often have a wild and unpredictable price movement. Minor sell or buy can cause significant changes resulting in instant losses or profits and rendering the short-term price changes almost unpredictable.
• Economic Downturn Exposure: In general economic slowdowns or crises, financially weak and microcap firms that are traded in penny stocks are more likely to experience more severe drops and slow recovery compared with well established companies.
• Permanent Capital Loss: Most microcap stocks have weak fundamentals and can suffer business failure or insolvency resulting in permanent losses.
• Price Manipulation and Volatility: Thinly traded stocks are easily manipulated and hence their price may change drastically. Additional Surveillance Measures (ASM) or Graded Surveillance Measures (GSM) are also imposed on many stocks lower than 5 on account of suspicious trading activities.
• Limited Disclosure: SME-listed stocks or small caps may have less frequent and incomplete financial reporting, making it hard for investors to assess true performance.
• Sector and Policy Sensitivity: Since many of these companies operate in niche or vulnerable sectors, government policy changes, regulatory reforms, or unfavourable industry dynamics can have disproportionate negative impacts.

How to Identify Quality Stocks Under ₹5

Identifying promising stocks priced under ₹5 requires a combination of quantitative and qualitative analysis:

• Check Corporate Governance: Select companies with regular, transparent disclosures and clean audit reports.
• Look for Improving Fundamentals: Seek stocks with consistent revenue growth, rising cash flows, and margin improvements over recent quarters.
• Prefer Growth Sectors: Favour companies active in infrastructure, financial technology, or government-supported industries.
• Promoter Holding Stability: A Higher or increasing promoter stake often indicates confidence and limits the chances of price manipulation.
• Compare Financial Ratios: Evaluate P/E and P/B ratios against sector benchmarks to find undervalued opportunities.

Should You Invest in Stocks Under Rs 5 Now?

Investors interested in high-risk, high-reward stocks have a productive field in stocks below 5 rupees. They are a good learning, speculation and possibly multibagger-return-catching tool. These stocks however should not constitute the major part of a portfolio because they are volatile and may lead to loss of capital.

Investors are advised to do thorough research, put up small amounts in diversified amounts of various picks and exercise discipline in keeping track of their holdings. Stocks that are priced below 5 rupees should be held by speculative or risk-taking investors and not by conservative wealth accumulators.