“Penny Stocks” the word which is always being ignored by most of the investment advisors. The reason behind this ignorance is their weak fundamentals, high debts and mere growth prospects etc. But there is also the category of penny stocks which are providing consistent returns to their investors. These penny stocks are almost debt-free and that adds an ingredient of confidence in the minds of those investors who are attracted by their lower prices and enormous returns.
The debt-free penny stocks usually have higher growth potential and low risk as compared to other penny stocks which are excessively uncertain. Being debt-free it also strengthens stock fundamentals as their debt-equity ratio is almost reduced to zero.
Therefore, in this article we are going to list some of the best debt-free penny stocks which are under Rs 100 and are worth investing.
Top Debt-Free Penny Stocks
1. Taparia Tools
Taparia Tools Ltd, founded in 1969, is a manufacturer and trader of hand tools. Modern Forge shop, Machine shop, Heat treatment, Polishing, Nickel chrome plating, and other manufacturing facilities are available at the company. In FY21, the company generated 23 % of its revenue from manufactured products, 74% from traded products, and 3% from scrap sales.
| Market Cap.(cr) | 3.19 |
| Debt-Equity ratio | 0 |
| ROE(%) | 28.7 |
| CMP(Rs) | 10.5 |
2. Avonmore Capital and Management services
Avonmore Capital & Management Services is in the financial activity business. The company operates in several business segments, including debt and equity market operations, consultancy and advisory fees, merchant banking, underwriting commission, corporate and infrastructure advisory and loan syndication fees, and arranger of debts/bonds, among others.
| Market Cap.(cr) | 151 |
| Debt-Equity ratio | 0 |
| ROE(%) | 17.1 |
| CMP(Rs) | 64.6 |
3. Reetech International Cargo & Courier
Reetech International Cargo and Courier Ltd, founded in 2008, is an Indian coal supplier. The product portfolio of the company includes coal from Indonesia, South Africa, Australia, and India. Reetech International Cargo & Courier Ltd. (RICCL) began operations in agriculture goods such as rice milling, dal milling, dal processing, and so on under the banner of M R Agriculture Pvt. Ltd. and has since continued. In 2020, it expanded into coal trading and changed its name to the current one.
| Market Cap.(cr) | 24 |
| Debt-Equity ratio | 0 |
| ROE(%) | 76.9 |
| CMP(Rs) | 56.8 |
4. Jullundur Motor Agency
Jullundur Motor Agency (Delhi) was founded in 1927 and specializes in the trading and distribution of automobile parts, accessories, and petroleum products. The company is headquartered in Gurugram and has offices throughout India. The company sells brakes, bearings, clutches, cooling systems, engine components, suspension, power steering, oil & lubricants, filters, and so on. The majority of the Company’s suppliers are vehicle manufacturers’ original equipment manufacturers (OEMs).
| Market Cap.(cr) | 144 |
| Debt-Equity ratio | 0 |
| ROE(%) | 13.8 |
| CMP(Rs) | 63.2 |
5. Bervin Investments and Leasing
Bervin Investments & Leasing was founded in 1990 as a private company to conduct leasing and investment business. In November 2001, the company was registered as a non-banking financial institution not accepting public deposits under Section 45 IA of the Reserve Bank of India Act, 1934. Asset leasing and asset financing were conducted concurrently with investment activities. The company’s primary business at the moment is investment activities.
| Market Cap.(cr) | 20.1 |
| Debt-Equity ratio | 0 |
| ROE(%) | 44.8 |
| CMP(Rs) | 34 |
6. Tamil Nadu Petro Products
Tamilnadu Petroproducts Limited, headquartered in Chennai, Tamil Nadu, India, is a joint venture between Southern Petrochemical Industries Corporation Limited (SPIC) and Tamilnadu Industrial Development Corporation Limited (TIDCO) that manufactures petrochemical products such as Linear Alkyl Benzene (LAB), Caustic Soda, Chlorine, and Propylene Oxide.
| Market Cap.(cr) | 717 |
| Debt-Equity ratio | 0 |
| ROE(%) | 26.2 |
| CMP(Rs) | 79.6 |
7. SPL Industries
SPL Industries Ltd, founded in 1994, is a manufacturer and exporter of knitted fabric and knitted garments. The company is an Apparel Export House that designs, manufactures, and sells a wide range of outerwear in the international market, such as T shirts, sweat shirts, polo shirts, and so on. The company has two manufacturing facilities in Faridabad, with a total annual production capacity of 60 lakh pieces.
| Market Cap.(cr) | 174 |
| Debt-Equity ratio | 0 |
| ROE(%) | 13.9 |
| CMP(Rs) | 60.2 |
8. B N Securities
B.N.Rathi Securities Ltd, founded in 1985, is a securities brokerage firm that also handles depository operations and institutional equities. Through their offices across the country, the company provides Trading and Investment Opportunities in multiple markets and segments such as equity, F&O, IPOs, currency, and mutual funds to investors. For secondary market operations, it is registered with Life Insurance Corporation of India Ltd, UTI, Bank of India, and Bank of Maharashtra.
| Market Cap.(cr) | 29.4 |
| Debt-Equity ratio | 0 |
| ROE(%) | 16.3 |
| CMP(Rs) | 35 |
9. Steel City Securities
Steel City Securities Ltd has been a leader in retail stockbroking, DP Services, E-Governance, Corporate insurance agents, and marketing support services in Southern India since 1995. They are the pioneers in introducing the Franchisee model to expand business potential in Andhra Pradesh’s urban and rural areas. They are also present in Tamil Nadu, Karnataka, Orissa, Chattisgarh, and Maharashtra.
| Market Cap.(cr) | 95.9 |
| Debt-Equity ratio | 0 |
| ROE(%) | 13.8 |
| CMP(Rs) | 63.5 |
10. Lahoti Overseas
Lahoti Overseas was founded in 1990 with the goal of exporting high-quality cotton yarns from India’s leading spinning mills. Beginning with OE yarns, the company’s product line now includes a wide range of Cotton Yarns such as carded, combed, and compact ring spun yarns in coarse and fine counts, flex yarns, mélange yarns, ply yarns, and special yarns. Lahoti has now branched out into other fibres, offering yarns such as Viscose Spun, Polyester Spun, Polyester DTY, Linen, PVA, Blended Yarns, and Slubs.
| Market Cap.(cr) | 78.9 |
| Debt-Equity ratio | 0 |
| ROE(%) | 15.8 |
| CMP(Rs) | 27 |
Advantages of Investing in Debt-free Penny Stocks
- Investors’ Confidence:If a company’s business is running without debt, it serves as a positive factor for the investors. As a company, it is able to manage all its expansionist policies along with its operations by itself.
- Strong Fundamentals: Companies that are debt-free generally have strong fundamentals, as they are sustainable enough to run their own businesses with their own money.
- High dividend Yield: If the company’s free from debt and, along with it, offers a higher dividend yield, then that’s a deadly combination. These two factors denote the company’s stable position in a volatile market.
Final Thoughts
Though most investors consider investing in penny stocks to be gambling, it all depends on how we select or filter out some of the best-performing penny stocks. There are also penny stocks with solid fundamentals that provide consistent returns to investors. So, when it comes to penny stocks, the filtering process is crucial.
