Top 10 Fundamentally Strong Penny Shares to Buy in 2025

Penny shares are commodities of small organisations listed on the stock exchange. They are low-priced, mostly under INR 20 per share, not commonly traded, and determined by abrupt spikes in market volatility. 

Penny shares come with a higher risk and higher reward plays. They are in the hundreds. Picking the best among them is quite complex. But they can give you potential rewards to build wealth. For example, Reliance Power was trading at INR 16.95 on 30th October 2023, has increased by 147.96% and is currently trading at INR 42.03.  

Choosing the best penny share to buy requires an individual to know about its strong fundamentals, such as positive profitability, reasonable debt, and effective cash flow. Experienced research professionals of Univest picked the top 10 fundamentally strong penny shares to buy in 2025 to help you get the highest possible return. 

List of Fundamentally Strong Penny Shares

*Data is updated as of 30th October 2024.

Stocks Overview

1. Prakash Steelage Ltd. 

Prakash Steelage Ltd. is an Indian steel sector organisation that produces and exports welded pipes, tubes, and stainless steel. The business is run under the section “Manufacturing and Trading of Stainless Steel Tubes & Pipes.”  Here are some of its strengths and weaknesses to analyse this penny share to buy. 

Strengths

• Increase in sales of 62.91% as compared to the past three years. 
• There was a marked reduction in debt by INR 28.76 cr. 
• The cash conversion cycle is efficient at -70.90 days. 

Weaknesses

• Promoter holding has followed a declining trend over the past three years. 
• Total earnings include a significant other income of INR 36.6 cr. 

Market Capitalisation: INR 148.40 cr. 

Dividend Yield: 0 

Debt: INR 3.1 million 

2. Vodafone Idea Ltd. 

Vodafone Idea is a joint venture between the Vodafone Group and the Aditya Birla Group, a major telecom operator in India. It offers value-added services, data services, and voice calls. Here are some of its strengths and weaknesses to analyse this penny share to buy.

Strengths

• From simple voice calls to high-speed data plans, a diverse set of products meets the needs of distinct customer segments. 
• VI’s goals included a diversified multi-product portfolio and improved operation efficiency, which were met through partnerships with various industry stakeholders. 

Weaknesses

• The future growth of the company is also expected to be hampered by its heavy debt burden. 
• VI operates in a highly competitive market with giant players such as Reliance Jio and Bharti Airtel. Therefore, aggressive competition could impact pricing.

Considering Vodafone Idea Ltd.’s huge debt burden, intense competition, and dwindling subscriber base, investing in it could be risky. Moreover, if the organisation overcomes these hurdles, it will definitely become a powerful brand and multi-bagger stock for investors. 

Market Capitalisation: INR 53529 cr.

Dividend Yield: 0

Debt: INR 210000 cr. 

3. Yes Bank Ltd.

Yes Bank Ltd. is one of the largest private sector bank groups in India, which offers a variety of financial products and services to both corporate and personal clients. The bank has undertaken significant restructuring and rehabilitating efforts in the past decades. Here are some of its strengths and weaknesses to analyse this penny share to buy.

Strengths

• Significant advances through the bank’s recovery procedure help it improve its financial position and asset quality. 
• Yes Bank attaches immense importance to digital banking and offers its customers world-class products and services to meet the fast-changing requirements of modern customers. 

Weaknesses

• It operates in a highly competitive sector with several public and private banks competing aggressively for market share. 
• While the asset quality has improved, the bank is still struggling with the problems related to its non-performing assets. 

Yes, Bank Ltd. has a robust recovery and expansion prospect. Investors must assess the quality of assets, financial performance, and prospects before investing in this penny share. 

Market Capitalisation: INR 64920 cr

Dividend Yield: 0.

Debt: INR 80507 cr.

4. Econo Trade India

Econo Trade India is a non-banking financial corporation (NBFC) registered in Kolkata, India. It offers advances and intercorporate deposits to businesses. 

Strengths

• This penny share might be undervalued because it is offered at a significant discount on its book value. 
• The high-profit growth of Econo Trade India made it one of the best penny shares to buy. 

Weaknesses

• It is a small-cap organisation with a thin capital base and fewer customers than giant players in the identical sector. 
• The organisation may have contingent liabilities that can impact its stability in the upcoming years. 

This stock could better fit your portfolio if you are a risk-taking investor. However, its volatility and liquidity issues entail numerous risks. 

Market Capitalisation: INR 16.80 cr.

Dividend Yield: 0 

Debt: INR 29.22 cr.

5. Vikas Ecotech Ltd.

Vikas Ecotech Ltd. is an Indian company that mainly manufactures specialised chemicals. It serves various industries, such as packaging, medicines, infrastructure, and agriculture. Here are some of its strengths and weaknesses to analyse this penny share to buy.

Strengths

• The firm has grown steadily in profits over the last few years.
• Financial risk for Vikas Ecotech is reduced through its healthy balance sheet and low debt. 
• The company has a specialised chemical portfolio to cater to diversified industries.

Weaknesses

• Due to this penny share’s small-cap status, Vikas Ecotech might not be able to compete with other bigger houses in the industry.
• The company uses shareholder equity less efficiently because its return on equity is relatively very low.

Vikas Ecotech is a volatile penny share to buy. So far, this stock has been limited in size and has a low return on equity, having remarkable growth in recent times. Investors should talk to a financial professional or do intense research before making any investment decisions.

Market Capitalisation: INR 564 cr. 

Dividend Yield: 0

Debt: INR 19.29 cr. 

6. Taparia Tools Ltd. 

A Sweden-based organisation incorporated in 1969, Taparia Tools Ltd. offers cutting-edge solutions related to hand tool needs. Over the past five years, it has achieved immense growth in its profitability at a CAGR of 37.2%.

Also, the company maintained a healthy dividend payout of 48.6%, which reflects its potential for stability and growth. Here are some of its strengths and weaknesses to analyse this penny share to buy.

Strengths

• The company has healthy margins and maintains steady flows, which reflects its performance with sound finances in its annual deliveries.
• Zero debts also enhance Tpria’s financial position and, hence, security.
• Income-driven investors search for investment avenues; companies with very high-paying returns are chosen.

Weaknesses

• It remains on the bottom list and often fails due to strong corporations in the same industries as these.
• The company sells a relatively minuscule product lineup compared to the more prominent competitors.

Taparia Tools is an attractive investment choice for investors seeking aggressive growth and income from dividend payments. The penny share to buy is a good investment because of its high dividend yield, little debt, and strong financial performance. Its remarkable journey has attracted many potential investors. 

Market Capitalisation: INR 13 cr. 

Dividend Yield: 503%

Debt: INR 3.3 million

7. GTL Infrastructure Ltd. 

GTL Infrastructure Ltd. (GTLINFRA) is a telecommunication infrastructure company that offers network solutions to telecom carriers. The company has been experiencing financial issues lately, reflected in its declining profits and sales. Here are some of its strengths and weaknesses to analyse this penny share to buy.

Strengths

• The company has a management team with several years of experience in the telecom industry.
• GTL Infrastructure earns revenue from sources such as Tower leasing, fibre optic cable leasing, and managed services.
• In pursuit of new commercial opportunities, the company engages in strategic alliances with major telecom service providers.

Weaknesses

• One significant reason investors worry about GTL Infrastructure is its huge debt.
• If the promoter’s holding in the business is low, it may reflect that the promoters don’t believe in the prospect.

Stock prices of GTL Infrastructure have recently oscillated. As the stock has plunged severely over the past couple of years, its penny share can be purchased at a lower price-to-book value of 0.48. GTL Infrastructure has significant debt obligations and poor margins, and the company is witnessing a decline in its revenues. The investment is quite risky. Therefore, the investor must consider extreme caution before putting in their shares.

Market Capitalisation: INR 2500 cr. 

Dividend Yield: 0

Debt: INR 3900 cr.

8. Unitech Ltd. 

Unitech Ltd. is an infrastructure and real estate company in India. The legal and financial issues have blemished the company’s image and stock price. Here are some of its strengths and weaknesses to analyse this penny share to buy.

Strengths

• If Unitech can successfully complete its projects, it will have a vast land bank that would be a huge asset.
• Even though Unitech has had many problems lately, it is still a brand name in the real estate industry.

Weaknesses

• The company has suffered numerous financial issues, including significant debt and liquidity.
• Projects meant to generate revenues and, thus, pay their commitments to the buyers have been delayed or cancelled.

Unitech, a prominent penny stock to buy, has been highly volatile and has witnessed significant declines in the last few years due to the various troubles the company is facing. Because of the uncertainty over the company’s future, the stock is often considered a high-risk investment. Due to its financial and legal issues, one should exercise utmost caution before buying shares of Unitech.

Market Capitalisation: INR 2610 cr. 

Dividend Yield: 0 

Debt: INR 7230 cr.

9. Sunshine Capital Ltd. 

Loans, investment, and advisory services are a few financial products under which Sunshine Capital Ltd. operates as a financial institution or NBFC. Here are some of its strengths and weaknesses to analyse this penny share to buy.

Strengths

• The corporation ensures diversified assets exist in the portfolio. Thus, any potential risk may be evaded.
• Sunshine Capital’s professional lives reflect the rich experience profiles of management, who have built up a good name within the financial sector service industry.

Weaknesses

• Investors might feel the company’s debt-to-equity ratio is too high.
• The company has been known for past asset quality concerns, which have adversely affected its financial performance.

Sunshine Capital’s stock has fluctuated in recent years. The current selling price is attractive to an investor because of its relatively low price-to-book value ratio. However, there are serious worries about the company’s excessive debt and asset-quality problems. It is a very high-risk investment because of these problems.

Market Capitalisation: INR 1009 cr. 

Dividend Yield: 0

Debt: INR 670 cr. 

10.  Mangalam Industrial Finance Ltd. 

Mangalam Industrial Finance Ltd. is an NBFC mainly into leasing and financing. Here are some of its strengths and weaknesses, which can help you analyse this penny share to buy.

Strengths

• The business has an experienced and proven management team in the financial services sector.
• Mangalam Industrial Finance offers its customers a diversified portfolio of lease and loan products to help them achieve a diversified risk profile.
• The company is almost debt-free and working to improve its business performance.

Weaknesses

• The NBFC industry is highly regulated; any change in the legislation may affect the business.

Recently, Mangalam Industrial Finance’s stock price fluctuated. Some value investors would see this company as quite appealing since it is traded at a relatively low price-to-book value ratio. On the other hand, this company has some grave risks because of its high debt and asset quality issues. Given the company’s debt levels and asset quality problems, investing through Mangalam Industrial Finance appears to be a highly risky venture.

Market Capitalisation: INR 337.54 cr. 

Dividend Yield: 0

Debt: 0

Benefits of Investing in Penny Shares

Unlike their speculative peers, penny shares commonly belong to sectors with stable outlooks and often provide transparent financial disclosure. Buying fundamentally strong penny shares is good for earning higher returns, but other benefits exist. Let’s explore them together. 

• Accessible for All: The low price range of such stocks makes them easy to invest in. If anyone does not have ample capital and wishes to invest a small amount in shares, they can definitely go for it. 
• Dividend: One can get dividends from penny shares. It is apart from returns as the company prefers to share part of the profit among all the shareholders. The dividend amount/percentage depends on the price of the share (it could be face value). For example, Taparia Tools Ltd. traded at a fraction of its book value and offered a dividend yield of 870%. 
• Required Low Investment: Small investments cannot produce bigger losses. You can buy more penny shares for less money, which could be another benefit of purchasing such stocks. 
• Investment in Multibaggers: A stock may be dead today, but that doesn’t mean investing in it is a waste. If you invest a small corpus in the penny share, you can experience robust growth trajectories. 

Risks in Buying Penny Shares

If you have fundamentally strong penny shares in your portfolio, your investment may vanish in thin air. You might need clarity over it. Let’s help you identify the primary risks related to penny shares. 

• Market Manipulation: A small rumour about penny shares can mislead investors into buying worthless stocks. Beware of the impacts of such inaccurate information on the organisation’s performance and future prospects. 
• Inability to Sell: Building a large corpus of penny stocks doesn’t guarantee higher returns. Sometimes, thin trading volumes make it difficult for investors to cash out. You might have to deal with a situation where you will try to sell shares but can’t find buyers. 

Key Takeaways

• Penny shares commonly have a value below INR 20 and can become multibagger in the future. 
• Not all penny shares maintain dividend payout. It depends on the company’s stability, growth, and shareholder value. 
• These stocks generally have small market capitalisations and can build investors’ wealth quickly. 
• As an investor, one must look beyond short-term volatility in the market and prefer organisations with solid foundations and growth prospects. 
• Remember that the debt-to-equity ratio must be less than 0.5 when choosing penny shares. 

Frequently Asked Questions

1. What is a Penny Share?

Penny shares are stocks that sell at very low prices, sometimes less than one dollar per share. These are usually small and obscure businesses.

2. Why do Penny Shares Trade at Low Prices?

There are various reasons why penny stocks tend to sell at low prices. These include:

• Low Market Capitalisation: These businesses have lower market valuations, which makes them less attractive to institutional investors.
• High Risk: Since such shares are easily manipulated in the marketplace and even quite volatile, they often represent a high-risk category.
• Poor Information Availability: As such, investors may not find adequate information concerning the firms in which they are interested, and proper determination of the actual value of such companies might become difficult.

3. Are Penny Stocks a Good Investment?

Penny stocks are known to be high-risk, high-reward plays. They probably will not win, but there is a good chance that they will win big. So, before investing in penny stocks, study them very well.

• Company Fundamentals: Examine the management team, business plan, and company financial status.
• Market Sentiment: Identify the market feeling on the stock and any new information.