Best 5 Stocks under ₹200 to Invest in 2024

"Stocks under 200" refers to equities of companies whose stock values are less than ₹ 200. New comers may find these companies cheaper relatively because of their comparatively lower share prices & perceived accessibility. This article examines list of five Indian stock market stocks that are fundamentally sound & trade for less than ₹200. characteristics, varieties, & advantages of purchasing these stocks will also be covered in this article.

1.    Price: Selected stocks under ₹200 for affordability.
2.    Dividend Yield: Focused on stocks offering consistent dividend yield, like Indian Oil Corporation Ltd at 6.81%.
3.    P/E Ratio: Chose stocks with lower P/E ratios for potential undervaluation.
4.    ROCE: Prioritized companies with efficient capital use, such as Indian Oil Corporation Ltd with 21.1% ROCE.
5.    ROE: Selected stocks with strong returns on equity, e.g., Union Bank of India at 15.6%.
6.    Debt to Equity: Assessed to ensure manageable debt levels, choosing companies like Housing & Urban Development Corporation Ltd.

Best 5 Under ₹200 Stocks

Here are following Top 5 Stocks under ₹200 to invest in 2024:

Data as of 4th September 2024
(Disclaimer: Please note that above list is for educational purposes only, & is not recommendatory. Please do your own research or consult your financial advisor before investing.)

Top 5 Stock below ₹200: Overview

1- Indian Oil Corporation Ltd

With its headquarters in India, Indian Oil Corporation Limited is broad oil firm with many business areas, including petroleum products, petrochemicals, & other business activities. 
Solar power generation, windmills, business of explosives & cryogenics, & gas & oil exploration are all included in Other Business Activities category. Full hydrocarbon value chain is covered by Indian Oil's operations, which also include manufacturing of petrochemicals, exploration & production of gas & crude oil, marketing of gas, pipeline transportation & marketing of refined products, generation of alternative energy sources, & worldwide market expansion.

Strengths:

1. Stock offers respectable 6.81% dividend yield.
2. Throughout last five years, company has produced strong profit growth at CAGR of 19.1%. 
3. It has also continued to pay out solid dividend of 42.6%.

2- Indian Railway Finance Corporation Ltd

The Indian Railways' financing division, Indian Railway Finance Corporation Limited, is mostly involved in leasing & finance business. Its primary business is borrowing money from financial markets to create or acquire assets, which are then leased to Indian Railways through finance lease contracts. 

The primary objectives of corporation are to finance purchase of rolling stock assets, lease railway infrastructure assets, & lend money to Ministry of Railways (MoR) entities. Using leasing approach helps Indian Railways finance its rolling stock & project assets.

Strength: 

Has been maintaining healthy dividend pay-out of 30.8%

3- Housing & Urban Development Corporation Ltd

As techno-financing organization, Housing & Urban Development Corporation Limited is mainly concerned with funding infrastructure projects, including retail loans. 
In addition, organization provides consulting services & arranges national & international government officials' capacity-building programs, workshops, & seminars. Urban areas' many sectors, including water supply, sewage, drainage, solid waste management, roadways, energy, smart cities, industrial infrastructure, & more, are all covered by its project finance.

Strength:

Has been maintaining healthy dividend payout of 41.8%.

4- SJVN Ltd.

The company's activities are divided into three primary sectors: power transmission, consulting services, & electricity generation using solar, wind, & hydropower. Power transmission, thermal power, hydropower, wind power, solar power, consulting, & power trading are just few of energy-related industries it covers in its portfolio. SJVN has ventured into wind energy industry, beginning with 47.6 megawatt (MW) Khirvire Wind Power Project located in Ahmednagar district of Maharashtra's Khirvire & Kombhalne villages. 

After then, 50 MW Sadla Wind Power Project was established in Gujarat's Surendranagar district's Sadla village. In addition, SJVN now manages three solar projects with combined installed capacity of roughly 81.3 MW.

Strengths:

1. Has been maintaining healthy dividend payout of 65.4%
2. Debtor days have improved from 48.3 to 23.6 days.

5- Union Bank of India

Treasury Operations, Corporate & Wholesale Banking, Retail Banking Operations, & Other Banking Operations comprise four main parts of bank's organizational structure. Together with demat & online trading accounts, Treasury Operations section provides range of account services, such as savings & current accounts, term & recurring deposits, & more. 

Services like working capital, project financing, trade finance, lines of credit, & channel financing are provided by Corporate & Wholesale Banking division. This division also offers services linked to private equity, loan syndication, structured finance, & merger & acquisition advising. It also supports debt structuring & restructuring.

Strengths:

1. Union bank Stock is trading at 0.96x its book value as of Sep 2024.
2. Has delivered good profit growth of 46.4% CAGR over last 5 years
3. Has been maintaining healthy dividend payout of 22.9%

Advantages of purchasing Best stocks under ₹200

Purchasing stocks under ₹200 offers several advantages. These stocks often belong to small-cap or mid-cap companies with high growth potential, allowing for significant returns. They enable diversification even with limited budget, reducing overall investment risk. Lower-priced stocks are accessible for beginners, providing low-risk entry into stock market. Additionally, some of these stocks may offer dividends, providing steady income stream. Overall, they present affordable way to build diverse & potentially high-yielding investment portfolio.

Who Should Invest in Best Stocks Under ₹ 200?

Investing in stocks under ₹ 200 can be strategic move for several reasons. 
Firstly, these stocks often belong to small-cap or mid-cap companies with significant growth potential. As these companies expand, their stock prices can increase substantially, offering high returns on investment. 
Secondly, lower-priced stocks allow for diversification even with limited budget, reducing risk. Additionally, these stocks can be more accessible for new investors who are cautious about investing large sums. Finally, some of these stocks may offer dividends, providing steady income stream while you wait for capital appreciation.

Conclusion

To sum up, our investigation of top equities under ₹200 that are fundamentally sound is now complete. Investing in firms based solely on stock price is not inherently incorrect, but it shouldn't be main motivation. Before making investment, investor should conduct thorough fundamental research of equities. When it comes to allocation, sector diversification, & other variables that impact portfolio performance, investor should take comprehensive strategy.