Being one of the fastest developing countries in the world is accompanied by the demand to focus on various crucial areas for development. Semiconductor is one such area demanding significant attention from policymakers and businesses. History is evident that countries like China obtained their manufacturing prowess due to focus on such raw material industries.
India is marching on the same lines and gradually providing the required efforts for the semiconductor industry. This will help in unleashing the support for the domestic production of electronic devices, vehicles and enhance electricity generation technology. Investors can become part of this growth by investing in semiconductor-related industries.
The stock market can be a favourable avenue for the same. Moreover, investors with a low investment corpus can invest in the penny stocks belonging to this industry. Let us explore some of the best semiconductor penny stocks in India.
Indian semiconductors industry
Electricity is one of the key driving forces for the overall development of any country’s industries. One of the core components for this electricity generation and distribution is semiconductor materials. These bridge the gap between the conductor and insulator, which later helps in transferring the current and generation of the electricity. India has been long dependent on other countries like China for this raw material.
Globally, Taiwan, Korea and China are leading in the production of semiconductor capacity. However, India is also planning to bank on this industry in its aim to become the fifth largest economy. The bullish sentiment on the sector is evident as the government has incentivised nearly $10 billion in projects under the Semicon India Programme. Moreover, the private sector participation is visible with the first ‘Made-in-India’ semiconductor chip, set to launch in 2025 by Micron Technologies. The India’s semiconductor production prospects may sure in the upcoming years:
| Year | Indian semiconductor industry (Amount in US $ billion) |
| 2022 | 26.3 |
| 2023 | 34.3 |
| 2032 | 271.9 |
Along with this global and governmental efforts, some indigenous companies are also positive about this sector. Nearly 19 startups focusing on the semiconductor industry are in the process of adding their prowess to the advancement.
Top 10 semiconductor penny stocks in India
The top 10 semiconductor penny stocks in India present a unique opportunity for investors looking to tap into the growing demand for semiconductor components and related technologies. These stocks are priced under ₹10, which makes them an attractive choice for small investors, but they come with a higher level of risk due to their low price point and market volatility.
Sundram Fasteners Ltd This company is a prominent player in the automotive and semiconductor components sector. It manufactures a range of high-precision components, including those used in electronics and automotive applications. The company’s consistent performance and demand for its components in various industries make it a top pick for those looking to invest in the semiconductor space.
Sterling Tools Ltd, is another important name in the electronics and semiconductor sector. It specializes in manufacturing fasteners and precision-engineered products, serving industries that rely heavily on high-quality electronics components. Their consistent demand from automotive and industrial sectors gives them an edge in the semiconductor market.
Jindal Poly Films Ltd, (primarily known for its operations in electronics and packaging, also holds a significant place in the semiconductor sector, particularly in the manufacturing of electronic components and packaging solutions. The company’s affordable pricing and diverse portfolio make it a noteworthy stock to consider for long-term investments.
Veto Switchgears & Cables Ltd, specializes in electrical components, which play a critical role in the functioning of semiconductor products. Its focus on producing wires and cables for various industries, including power generation and distribution, positions it well within the semiconductor supply chain, as demand for electronic components continues to rise.
Eltech India Ltd, is another affordable stock in the semiconductor space, producing a variety of electronic components, especially for industrial and automotive applications. The company’s low price and specialized focus make it a good entry point for investors looking to diversify their portfolios with penny stocks in the semiconductor market.
Mirza International Ltd, while better known for its presence in the footwear industry, has also diversified into the electronics sector, which includes producing components for the growing demand for semiconductors. Its affordable pricing combined with steady growth prospects makes it an interesting stock for speculative investors.
BCL Industries Ltd, offers a deep-value investment opportunity. Although small, it focuses on semiconductor components, and its low price makes it a potential high-risk, high-reward play for those willing to explore lesser-known players in the semiconductor industry.
Blue Star Ltd is primarily recognized for its air conditioning and refrigeration products but has also made significant inroads into the semiconductor supply chain with its electrical and automation components. With its diversified portfolio, Blue Star offers stability and exposure to the semiconductor sector at a relatively low price.
KSL & Industries Ltd manufactures a variety of semiconductor components and components used in consumer electronics, making it a compelling investment in the rapidly evolving tech sector. The company’s focus on growth and accessibility at a low price point could offer great potential for small investors.
Comparative analysis
| Particulars (Amount in ₹ crores) | Surana Telecom and Power Ltd | RRP Semiconductors Ltd | Spel Semiconductors Ltd |
| Revenue | 19.88 | 11.15 | 8.18 |
| Net Profit Margin | 16.72% | (5.26%) | (56.72%) |
| Operating Profit Margin | 49.24% | 28.95% | (16.25%) |
| P/E* (in times) | 26.92 | 43.30 | 0.00 |
| Networth | 139.24 | 11.94 | 24.85 |
*P/E = Price to Earning Ratio
Pros and cons of penny stocks investment
Penny stocks are a feasible investment alternative for investors with a small investment purse. They have low market capitalisation compared to the rest of the stocks in the industry. However, like every coin has two sides, these stocks are also accompanied by their pros and cons:
| Pros | Cons |
| Low investment cost and entry barriers. | They may have high volatility and risk of losing investment. |
| If undervalued, the stocks may earn potential returns in the long term. | May be a part of any stock manipulation and can trap investors in the volatility. |
| Volatility provides multiple entry-exit price points for investors. | These stocks may be prone to market circuits due to their fluctuations. |
Summary
The semiconductor industry in India is expected to rise with nearly 26% CAGR by 2032, and investors can be part of this growth story by investing in the companies belonging to this sector. Moreover, investors with a small purse can explore some of the top semiconductor penny stocks in India, which may provide them with the desired exposure. However, investing can be a sensitive decision and would require research or expert help.
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Best Semiconductor Stocks in India?What is the future outlook for the Indian semiconductor industry?
The Indian semiconductor industry may see a bright light in the upcoming years majorly due to government support and global attention. It may grow by nearly 26% up to 2032. However, it demands the creation of suitable infrastructure and facilities. Investors can invest in the stocks of such companies to be a part of this growth.
For what purpose semiconductors are used?
These are mainly the raw materials connecting conductors and insulators. When semiconductor chips are produced domestically, the overall costs for many electronic items are reduced. It further reduces the burden of importing such items from foreign countries.
Are penny stocks too risky?
Usually, they are perceived to be highly risky avenues due to volatility. However, they are also accompanied by some advantages of diversification and potential returns. Moreover, investors also get different entry-exit prices due to volatility.
Are there any penny stocks related to the semiconductor industry?
In India, core semiconductor companies are not available in India, and only some penny stocks of the companies related to this industry are available. Stocks of Spel Semiconductors Ltd, Surana Telecom and Power Ltd and RRP Semiconductors Ltd can be some of these options available for investors with similar aspirations.
Is semiconductors a good investment in India?
Yes, semiconductors can add significant value to the investor’s portfolio and provide the desired diversification. Understanding the core business of such companies and assessing their future viability is crucial. Investors should make informed decisions regarding their investments in semiconductors.
List of Semiconductor Penny Stocks with Price?
Some examples of semiconductor penny stocks under ₹10 are Sundram Fasteners Ltd, Sterling Tools Ltd, Jindal Poly Films Ltd, and Veto Switchgears & Cables Ltd. Prices of these stocks typically range from ₹3 to ₹9.
Best Semiconductor Stocks in India?
The best semiconductor stocks in India include HCL Technologies, Sundram Fasteners, and Bharat Electronics. These stocks are more established players in the tech and electronics industry and have shown consistent growth.
