Shares below Rs 5 in India are often considered to be priced very low, and this leaves many investors wondering why they are priced so low. There are several reasons why this might be the case. One of the main reasons is that companies that have shares priced below Rs 5 are often small-cap or micro-cap companies that have not yet established themselves in the market. These companies often have a smaller market capitalization and may not have a proven track record in terms of profitability or growth. As such, many investors are hesitant to invest in these companies, which can drive down the price of their shares.
Another reason why shares below Rs 5 are priced so low is that they may have a higher level of risk associated with them. These companies may be in a highly competitive industry, or they may be facing other challenges that make it difficult for them to grow and expand. Investors may be hesitant to invest in these companies, which can drive down the price of their shares.
Additionally, shares below Rs 5 may be priced low simply because they are not in high demand. These shares may be available in large quantities, but there may not be a lot of investors who are interested in buying them. This can lead to a surplus of shares, which can drive down the price.
Despite the low price of shares below Rs 5, they can still be a viable investment option for some investors. These shares can offer high returns if the company is able to grow and expand, and if the investor is willing to take on the higher level of risk associated with these types of investments. However, it is important for investors to do their research and carefully evaluate the company before investing in shares below Rs 5. By doing so, they can make informed investment decisions that will help them achieve their financial goals.