Stocks Under 100

Stocks under Rs. 100 are often more affordable for investors with limited capital. If you are a beginner or if you do not want to invest heavily in the stock market, you can consider the best shares under Rs. 100. Finding these stocks may be challenging if you do not know how to get started. Fortunately, this list of the shares under Rs. 100 can help you get started with your investment strategy.

The prices of shares issued by different companies fluctuate almost daily. Listed companies are traded in the secondary market, so the demand and supply forces lead to frequent price changes. Often, the prices of some shares may dip below the Rs. 100 level. These companies, whose shares are priced less than Rs. 100 are considered to be ‘stocks under Rs. 100.’

To invest in stocks below Rs. 100, you can follow the steps given here.

• Step 1: Open a demat and trading account with a trusted stockbroker.
• Step 2: Perform in-depth research about the different shares below Rs. 100 to identify the companies that are potentially good investments.
• Step 3: Once you identify the best stocks under Rs. 100, decide which stock you wish to invest in and identify the ideal entry price point.
• Step 4: Place a ‘buy’ order for this stock using your trading account.

This is how simple it is to invest in stocks below Rs. 100. After you invest, ensure that you monitor your investment regularly and decide when you sell your shareholdings in a prudent manner.

If you simply want to identify the stocks whose prices are less than Rs. 100, stock screeners can help. However, if your goal is to identify the best shares under Rs. 100, you can look into the following factors.

• Net Profit Margin

  The net profit margin is a crucial indicator of how efficiently a company turns its revenue into profits. It is expressed as a percentage that tells you what portion of the revenue remains after all expenses are covered. A higher net profit margin indicates that a company is managing its costs well and generating significant profits. For stocks under Rs. 100, companies with a consistently high net profit margin may be attractive investments.

• Earnings Per Share (EPS)

  This metric, which divides the net earnings of a company by the total number of outstanding shares, measures the profitability of an entity. It shows you how much profit can be traced back to each share issued. For low-priced shares below Rs. 100, a strong or growing EPS can mean that a company has a higher potential for profitability and growth. A rising EPS over time also indicates good financial health.

• Price-to-Earnings (P/E) Ratio

  The price-to-earnings ratio measures a company’s stock price against its earnings per share. This ratio helps you assess whether a stock is undervalued or overvalued when compared with its earnings. A lower P/E ratio in stocks under Rs. 100 can mean that the company’s shares are undervalued. This makes it potentially more attractive to investors. However, you should also consider the context of the industry when interpreting the P/E ratio.

• Current Ratio

  The current ratio helps you understand if a company can manage its short-term liabilities using its short-term assets. To calculate this ratio, you divide the current assets by the current liabilities. A higher current ratio suggests that the company is in a strong position to meet its obligations. For shares priced under Rs. 100, a current ratio above 1.5 is typically a good sign of liquidity and lower financial risk.

• Debt-to-Equity (D/E) Ratio

  The debt-to-equity ratio evaluates a company’s financial leverage. It compares the total liabilities of an entity to its shareholder equity. A lower D/E ratio is a sign that a company is less reliant on borrowed money and has a more stable capital structure. When you look at shares under Rs. 100, a low D/E ratio can suggest that the company has managed its debt well and is less vulnerable to financial instability, especially during downturns.

Shares below Rs. 100 have a few distinct features that you must be aware of before investing in them. These key characteristics include the following:

• Volatility

  Affordability is one of the key benefits of under Rs. 50 stocks. The low price point of these stocks allows investors to enter the market and accumulate a greater number of shares with minimal capital.

• Affordability

  Due to the low price per share, stocks under Rs. 100 are typically more affordable for small-scale investors. They do not require huge amounts of capital outlay upfront.

• Large-Volume Trading

  Since these shares are priced more affordably, you can buy and sell higher quantities of these stocks. In contrast, it may be difficult to buy expensive stocks in large quantities.

• High Risks

  Stocks below Rs. 100 may be riskier, especially if they belong to growing companies or if they are highly volatile. You must ensure that the risks align with the potential rewards.

• Potential for Growth

  Many companies with shares trading below Rs. 100 may be small-cap entities. These companies may also have a high potential for growth if their operations are profitable.

• Liquidity Issues

  Some stocks under Rs. 100 may be harder to buy or sell, especially if they have liquidity issues. So, before you invest in a company, ensure that its stocks are liquid and easy to trade.

Shares under Rs. 100 are suitable for different types of investors, as explained below.

• Beginners and Small-Scale Investors

  These investors, who may not have much capital to start, may find stocks under Rs. 100 an attractive entry point into the market. They allow such investors to diversify across a number of shares without investing any substantial amount.

• Risk-Tolerant Investors

  Since stocks under Rs. 100 are usually small-cap or micro-cap companies, their prices can be highly volatile. This means they can offer large gains but also cause significant losses. Investors who are comfortable with this level of risk might find these stocks appealing.

• Experienced Investors

  Seasoned investors looking for undervalued opportunities may also find it beneficial to target low-priced stocks. However, thorough research is crucial to avoid value traps, where a stock appears cheap but has issues with its fundamentals.

Some shares under Rs. 100 may be fundamental good investments, but others may be risky. The primary limitations or risks of many stocks in this category include the following:

• Lack of Information

  Many companies with stocks priced under Rs. 100 may be issued by smaller or lesser-known firms. So, they often have limited information available for investors. The lack of transparency can make it difficult to assess the true financial health of these companies.

• Susceptibility to Manipulation

  These low-priced shares can also be more prone to price manipulation schemes like pump-and-dump tactics. Unscrupulous traders may artificially inflate prices, only to sell their holdings at the peak, leaving other investors with significant losses once the price crashes.

• Dilution of Shares

  To raise more capital, smaller companies may frequently issue new shares. This can dilute the value of existing shares and erode the value of your investment over time, especially if the company’s earnings do not keep pace with the increased number of shares.

• Potentially Unproven Business Models

  Some low-priced stocks also represent newer companies with untested or unstable business models. The lack of a proven track record increases the chances of business failure, which can result in the total loss of the investment.

• Large Trading Orders

  In stocks under Rs. 100, large buy or sell orders can significantly impact the stock price due to lower liquidity. A single large transaction can cause exaggerated price movements and make it difficult for small investors to execute trades at fair prices.