Best Debt Free Penny Stocks: An Overview
Zero-debt penny stocks are the shares of small-cap companies that usually trade at very low prices and aren't very liquid. These are also known as nano-cap stocks and micro-cap stocks. The prices of penny stocks are hard to predict because each share is worth so little. So, they can go up and down a lot, but they also have the potential to give big returns.
Debt is important to a company's current performance and future growth. With a penny stock, you should look at the company's debt level even more closely. Knowing how much leverage you have is important, especially in these hard times when interest rates are rising, and many businesses are still struggling because of the pandemic.
Debt Free Penny Stocks India
| Company | Share Price (Rs) | Marketcap (Rs Cr.) | P/E Ratio |
| Singer India | 72.65 | 390 | 31.09 |
| Railtel Corporation | 138.25 | 4447 | 22.06 |
| Jamna Auto Industries | 108.05 | 4307 | 25.53 |
| Ador Fontech | 75.55 | 264 | 16.35 |
| Rubfila International | 79.65 | 432 | 11.07 |
(Data as of 17th November 2022)
Disclaimer: The securities quoted are exemplary and not recommendatory. Past performance is not indicative of future returns
Best Debt Free Penny Stocks in India: Details
Singer India Ltd.
RHBV, which used to be a fully owned step-down subsidiary of Singer Asia, owns 59% of Singer India (SIL). Retail Holdings NV, Curacao (RHNV) is the parent company and owns 54.1% of the indirect equity.
SIL is one of the most famous and well-known brands of home appliances in the region. It has been doing business in India since 1977. It has a strong brand presence and is seen to be quickly diversifying in the home appliances space with a business model that doesn't require a lot of assets.
Even though SIL sells a wide range of products, the sewing machine business makes the company the most money. In the financial year 2021, the segment brought in 64% of the total income, up from 63% in 2020 and 70% in 2019.
So, if you want to invest in debt-free penny stocks in 2022, you should keep an eye on Singer India, which had gross sales of Rs. 4.1 billion and profit growth of 30.7% in the past year.
Fundamentals*
- P/E Ratio(TTM): 31.09
- ROE: 10.28%
- Face Value: 2
Railtel Corporation of India Ltd.
Railtel Corporation of India is a Mini Ratna (Category-I) PSU that was set up in 2000 to provide telecom-related services to the Indian Railways. It works in two main areas: telecom and projects.
The company has a strong parentage because the Indian government, through the Ministry of Railways, owns most of it. Railtel can handle any projects for the Railways that have to do with connectivity.
Railtel's presence in the market has grown steadily over time. It does this by providing telecom infrastructure and other related services to a number of public and private companies.
In the recently released "Fortune India Next 500 list of the year 2022," Railtel moved up 67 spots to rank 124th among India's top 500 midsized companies.
So, if you want to add some telecom infrastructure stocks to your portfolio, Railtel Corporation of India is a strong candidate for zero-debt penny stocks for 2022.
Fundamentals*
- P/E Ratio(TTM): 22.06
- ROE: 14.22%
- Face Value: 10
Jamna Auto Industries Ltd.
Even though the Indian commercial vehicle industry has been in trouble for a while, experts say that the segment will grow at a high double-digit rate in the financial year 2022.
The much-anticipated scrappage policy and the chance to reduce pollution and the cost of importing oil and raw materials are likely to boost sales.
Jamna Auto Industries has been a market leader in the domestic M&HCV OEM segment for over 60 years. In fiscal 2021, it made a total of Rs 10.5 billion in sales. With most of its business coming from big companies like Tata Motors and Ashok Leyland, the company has been able to keep its finances in good shape despite some rough times in recent years.
Jamna Auto is a well-known company that makes suspensions for commercial vehicles. They offer a full range of suspension options. As part of its plan to diversify, the company set up a strong after-market that provides a full range of spare parts. This helped the company's sales go from 9% in the fiscal year 2011 to 29% in the fiscal year 2020.
Jamna Auto Industries set up a research and development facility as part of its plan to grow. This helped the company get off the ground in new lines of products. Jamna Auto is the biggest CV spring maker in India and the third biggest in the world.
Fundamentals*
- P/E Ratio(TTM): 25.53
- ROE: 22.27%
- Face Value: 1
Ador Fontech Ltd.
The Covid-19 crisis caused back-to-back lockdowns, which caused a lot of trouble in the construction industry. But the market for welding electrodes around the world is about to get a big boost.
The market is expected to grow at a CAGR of 4.3% and reach US$ 27.22 bn by 2027, thanks to rising demand.
Some of the most important things that are driving this change are the introduction of cutting-edge technologies in welding automation and the development of custom and innovative designs that can be used in many core industries.
Welding is used a lot by Indian manufacturers to join metals and alloys. This makes Ador Fontech, one of India's best welding repair companies, a strong candidate for the list of 2022's most-wanted penny stocks.
With a strong balance sheet, Ador Fontech made a total of Rs 1.5 billion in sales in the financial year of 2021. This was made possible by a cash conversion cycle of only 37.1 days. Even though the company's sales have dropped 0.9% over the past 3 years, a current ratio of 4.03 shows that the company has enough money to keep going.
Ador Fontech is set up for long-term growth because the company is constantly investing in new and better welding techniques and materials. This gives the company another way to make money.
This is a penny stock that you should keep an eye on in 2022.
Fundamentals*
- P/E Ratio(TTM): 16.35
- ROE: 18.46%
- Face Value: 2
Rubfila International Ltd.
Rubfila International has been in business since 1994. It is run by Malaysia's Rubpro Sdn Bhd and Kerala State Industrial Development Corporation. People say that this company makes more rubber thread than any other in the country.
In the financial year 2021, Rubfila International reported a turnover of Rs. 2.7 billion, which was the highest in the company's history. This was an increase of 25.2% from 2020.
The business of exporting went up by 75%. The reported earnings per share (EPS) for the financial year of 2021 was $6.50, which was an increase of 83.5% from the financial year of 2020.
The company's annual revenue growth of 23.9% was better than its CAGR of 14% over the past three years.
With a PAT of Rs 1,404.1 m, the company made 101% more money than it did before. The yield on the stock is 1.4%. Rubfila remains a zero-debt company.
Fundamentals*
- P/E Ratio(TTM): 11.07
- Debt to Equity: 0.00
- ROE: 20.64%
- Face Value: 5
*(Data as of 17th November, 2022)
Disclaimer: The securities quoted are exemplary and not recommendatory. Past performance is not indicative of future returns
Conclusion
Everyone has to do their own research. But it must be combined with a good way to find the best debt free penny stocks. Check the balance sheet, look at the debt-to-equity ratio, and see if the company has paid consistent dividends for the last 5 years. Also, look at their book value and how much the promoters own. You don't have to have a lot of money to invest. You can start out small and still make a lot of money. Think of penny stocks as long-term stocks that you should buy and keep for a long time.
This is not an investment advisory. The blog is for information purposes only. Investments in the securities market are subject to market risks, read all the related documents carefully before investing. Past performance is not indicative of future returns. Please consider your specific investment requirements, risk tolerance, goal, time frame, risk and reward balance, and the cost associated with the investment before choosing a fund, or designing a portfolio that suits your needs. The performance and returns of any investment portfolio can neither be predicted nor guaranteed.
Is it a good idea to buy penny stocks with no debt?
Also, if a business has been running without any debt, it probably has strong fundamentals and a stable financial position. These debt-free penny stocks also tend to have better returns and higher dividend yields.
How can you tell if a stock has no debt?
Choose "Debt to Equity" under "Financial Ratios." The filter would be changed to include the debt-to-equity ratio. In the filter panel, set the debt-to-equity ratio to "0." By using the right filter, you can further narrow your choices to large-cap, mid-cap, or small-cap stocks.
What risks come with penny stocks?
Penny stocks are high-risk securities traded for a low price outside major market exchanges. They have small market capitalizations and low prices. Penny stocks are riskier because they don't have much history and information and are hard to buy and sell. Watch out for scams that involve penny stocks and try to get you to give up your money.