Future multibaggers in Indian stock market
Finding multibagger stocks in India depends on your research skills. You need to find the stocks that are fundamentally good but are priced very cheap because of some negative news or because of the perception that the company has high debt. You need to find out if the company has products which are, or will be, in high demand. Also, you will need to do some research on the key persons managing the operations. Do a check on their background and find out if they have a history of performing well.
Investing in penny stocks in India
What is a Penny stock in India? The name Penny Stocks in India comes from the American stock market. A Penny in a Dollar is like a paisa in a Rupee. 100 penny makes a Dollar, and 100 paisa makes a Rupee. In the old days, most American stocks had a face value of one dollar. Shares of companies that were doing good used to trade for pennies. Thus the name ‘Penny Stock’ became associated with cheap stocks.
I recommend that everyone should invest a portion of their investment money in at least two shares with the aim hitting a multibagger share. You should not invest more than 5 to 10% of your money kept aside for investment. This is a gamble for multibaggers.
Some penny stocks can give very high returns. Most investor Gurus will tell you to stay away from penny stocks. But if you do your research well, you may be able to pick some Multibaggers from penny stocks. If say you choose a penny stock at Rs.2- and it becomes Rs.4, then it is a multi-bagger. Your investment has multiplied by two times. There will always be some stocks in India which are driven down by negative news, even though the fundamentals of the company are good. If you can grab such shares at their lowest price during the fall, and hold onto it for some time, then you could have a multi-bagger in your hand.
My picks of Multibagger Shares in India
I thought I will share with you my experience in trying to hit multibaggers. Below are some of the cheap stocks I bought and still holding, in the hope that it will become multi-baggers. Out of the five shares I invested in the hope of getting multibagger shares, three have gained. One share, V2 Retail has multiplied by almost 25 times. These are the shares I have gambled in:
3i Infotech: I bought this share at about Rs.2.50, now it is about Rs.4-. My reason for buying this share is because I felt that it has some good products like an ERP software called ‘Orion’, Insurance Management software ‘Premia’, Banking solution software called ‘Kastle’ and some other software solutions. I feel that in a few years that this company should do good. The problem is that I bought this share may be, three years back and it is still struggling, but I plan to hold onto it.
8K Miles Software Services Ltd: This stock was trading near Rs.1000- at he beginning of 2018, but towards the midde of the year it got into controversies like the Auditor of 8K Miles Media Ltd. resigning and shares of the chief promoter of 8K Miles group being sold. The share dropped to below Rs.100. As usual, I did my research on Companies whose shares hit 52 week lows. I found out that basically 8K Miles Software Services Ltd is a very good Company in the Cloud business and that they have partnerships with Amazon Web Services, Google and Microsoft. I did a lot more research and I was convinced that this Company would get back to its Rs.1000- level share price. So I invested heavily at around Rs.100- per share. Today it is at Rs.159- and climbing. Hope it gets to my target price of Rs.1000-.
Morepen Labs: I do not remember the exact date I bought this share, but it was more than four years ago at a price of under Rs.6-. Now it is trading at about Rs.18-. Already a multi-bagger at three times, but I plan to hold on to it hoping it will go much higher. The reason for my buying this stock is that I was impressed by their product lines. They have USFDA approved manufacturing facilities for some important bulk drugs, and they have a retail line ‘Dr Morepen’ for home self-care medical instruments like BP machines. They also own ‘Burnol’ a famous medicine for burns.
Opto Circuits: I bought this share at a price of Rs. 12- about three years ago. Now it is down at about Rs.9-, but I am betting that it will go up soon. Opto Circuits is an Indian Company with operations all over the world. Their product line includes internationally approved small medical devices and implants like Stents.
V2 Retail: V2 retail shares were purchased by me around four years ago at a price of Rs.16-. I sold majority of my shares at above Rs.400. Now it has dropped to Rs.270-. I plan to buy some more if it drops further. I have been fortunate with this share. V2 retail has a chain of department stores, and they are expanding rapidly.