Many new investors believe that you need a large amount of capital to buy shares of high-quality companies. The high prices of stocks like MRF or Nestle can seem intimidating, leading many to hunt for stocks at lower prices. This search for affordability is logical, but it often leads beginners into the dangerous territory of low-quality “penny stocks.”
This guide is designed to solve that problem. We will show you that it’s entirely possible to invest in fundamentally strong businesses without a huge budget. This article will reveal the Best Stocks to Buy in India Under ₹500, focusing on companies with solid fundamentals, good governance, and clear growth potential—not just a low price tag.
An Important Note on Price vs. Value: Before we begin, it’s crucial to understand that a low stock price does not mean a stock is “cheap,” and a high price does not mean it’s “expensive.” A ₹100 stock with poor earnings can be far more expensive (in terms of valuation) than a ₹2000 stock of a profitable, growing company. Our focus here is on identifying valuable companies that happen to have a share price below the ₹500 mark.
Disclaimer: This article is for educational and informational purposes only and should not be considered financial advice. The stocks mentioned here are based on their fundamental strengths as of July 2025 and are not direct buy recommendations. Please conduct your own thorough research or consult a SEBI-registered financial advisor before making any investment decisions. Stock prices are dynamic and the data provided is approximate.
Top 7 Stocks to Buy Under ₹500 in India (2025 Picks)
Here is a curated list of companies with strong business models and promising futures, all trading under the ₹500 price point.
1. Tata Power – The Green Energy Powerhouse
- Sector & Overview: Tata Power is one of India’s largest integrated power companies. A part of the prestigious Tata Group, it is aggressively transitioning from traditional power generation to a future-ready, green energy portfolio, including solar, wind, and a massive network of EV charging stations.
- Key Financials (Approx.):
- CMP: ₹430
- Market Cap: ~₹1,37,000 Cr
- P/E Ratio: ~35
- EPS (TTM): ~₹12
- Why it’s a smart buy under ₹500: Tata Power is at the forefront of India’s clean energy revolution. With government policies strongly favouring renewables and electric vehicles, the company has a multi-decade growth runway. The backing of the Tata brand provides stability and trust, making it one of the best shares under 500 rupees for capturing the EV and green energy theme.
2. IDFC First Bank – The Modern Banking Challenger
- Sector & Overview: IDFC First Bank is a dynamic private sector bank led by the renowned banker Mr. V. Vaidyanathan. The bank has successfully pivoted from a wholesale-focused lender to a retail-centric bank with a strong focus on technology and customer service.
- Key Financials (Approx.):
- CMP: ₹95
- Market Cap: ~₹67,000 Cr
- P/E Ratio: ~20
- EPS (TTM): ~₹4.7
- Why it’s a smart buy under ₹500: The bank has shown impressive growth in its retail loan book while significantly improving its asset quality. Its tech-first approach appeals to a younger demographic. For investors looking for potential undervalued stocks India 2025 in the banking space, IDFC First Bank offers a compelling growth story at an accessible price point.
3. Indian Railway Finance Corporation (IRFC) – The Financial Backbone of Railways
- Sector & Overview: IRFC is the dedicated financing arm of the Indian Railways. As a Public Sector Undertaking (PSU), its primary business is to borrow funds from the financial markets to finance the acquisition of assets which are then leased out to the Indian Railways.
- Key Financials (Approx.):
- CMP: ₹180
- Market Cap: ~₹2,35,000 Cr
- P/E Ratio: ~36
- EPS (TTM): ~₹5
- Why it’s a smart buy under ₹500: IRFC operates on a very low-risk business model, as its sole client is the Government of India (via Indian Railways). It’s a key player in the massive infrastructure push in the railway sector. Furthermore, it often offers an attractive dividend yield, making it a relatively stable choice in the sub-500 category.
4. Ashok Leyland – Driving India’s Economic Growth
- Sector & Overview: As the flagship company of the Hinduja group, Ashok Leyland is the second-largest manufacturer of commercial vehicles (CVs) in India. Its product line includes buses, trucks, and light commercial vehicles.
- Key Financials (Approx.):
- CMP: ₹240
- Market Cap: ~₹70,000 Cr
- P/E Ratio: ~28
- EPS (TTM): ~₹8.5
- Why it’s a smart buy under ₹500: The performance of the CV industry is directly linked to the country’s economic activity. As India’s economy grows, the demand for logistics and transportation increases, directly benefiting Ashok Leyland. It is a cyclical stock but offers great potential during economic upswings.
Internal Linking Suggestion: “While these stocks are affordable, true long-term wealth is often built with market leaders. For more blue-chip ideas, check out our guide on the Best Stocks for Long Term Investment in India.”
5. Trident Ltd. – A Diversified Textile Giant
- Sector & Overview: Trident Ltd. is a leading manufacturer of yarn, home textiles (towels, bedsheets), and paper. Headquartered in Punjab, it is one of the largest exporters of home textile products in the world.
- Key Financials (Approx.):
- CMP: ₹40
- Market Cap: ~₹20,000 Cr
- P/E Ratio: ~50
- EPS (TTM): ~₹0.8
- Why it’s a smart buy under ₹500: Trident is a fundamentally sound company with a strong global footprint. It has consistently invested in capacity expansion and backward integration, improving its efficiency. For those looking for low price high potential stocks India in the traditional manufacturing space, Trident offers a solid business at a very low price per share.
6. Indian Oil Corporation Ltd. (IOCL) – The Energy & Dividend Major
- Sector & Overview: Indian Oil is India’s largest state-owned oil and gas company. It has a presence across the entire hydrocarbon value chain, from refining to pipeline transportation and marketing.
- Key Financials (Approx.):
- CMP: ₹175
- Market Cap: ~₹2,47,000 Cr
- P/E Ratio: ~6
- EPS (TTM): ~₹29
- Why it’s a smart buy under ₹500: IOCL is a classic value stock. It often trades at a very low P/E ratio compared to the market average. More importantly, it is one of the highest dividend-paying companies in India, making it an excellent choice for investors seeking a regular income stream along with capital appreciation.
7. Zomato Ltd. – The New-Age Tech Play
- Sector & Overview: Zomato is a leading food delivery and restaurant discovery platform in India. After a volatile period post-IPO, the company has focused heavily on achieving profitability.
- Key Financials (Approx.):
- CMP: ₹190
- Market Cap: ~₹1,67,000 Cr
- P/E Ratio: ~110 (High, as it is a growth stock)
- EPS (TTM): ~₹1.7
- Why it’s a smart buy under ₹500: Zomato operates in a duopoly with Swiggy, and its path to profitability has become much clearer. For investors with a higher risk appetite, Zomato represents a bet on India’s growing internet economy and the shift in consumer habits towards convenience. It’s one of the few high-growth tech stocks to buy under ₹500.
The Risks of Investing in Low-Priced Stocks
It is important to address the term penny stocks under 500 in India. Most stocks priced below ₹10-₹20 are “penny stocks” because their company fundamentals are weak, they are highly speculative, and they lack liquidity. The stocks listed in this article are not penny stocks; they are established companies that simply have a lower price per share. Always differentiate between a quality company at a low price and a low-quality penny stock.
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Conclusion: Building a Quality Portfolio on a Budget
Investing in the stock market doesn’t have to be an expensive affair. As this guide shows, it is entirely possible to build a portfolio of high-quality, growing businesses without needing a large amount of capital. The key is to always prioritize a company’s fundamental strength and future potential over its stock price.
This list of the Best Stocks to Buy in India Under ₹500 should serve as an excellent starting point for your research. The path to wealth creation is a marathon, not a sprint. Start your research today, diversify your investments with affordable quality picks, and take the first confident step towards building a powerful, long-term portfolio.
Frequently Asked Questions (FAQs)
Q1: Which is the best share under ₹500 in India? There is no single “best” share, as it depends on your risk appetite and investment goals. However, a company like Tata Power is often cited due to its strong parentage and its central role in the high-growth renewable energy and EV sectors.
Q2: Are stocks under ₹500 risky? The risk of a stock is determined by the company’s business fundamentals, not its price. A fundamentally weak company at ₹20 is far riskier than a market leader like Tata Power at ₹430. However, many stocks in this price range are small or mid-cap companies, which can be more volatile than large-cap blue-chip stocks.
Q3: How can I find good stocks under ₹500 on my own? You can use online stock screeners (like Screener.in) to filter companies based on criteria like:
- Market Price < 500
- Market Cap > 5,000 Cr (to avoid penny stocks)
- P/E Ratio < 40
- Debt to Equity < 1.5
- Return on Equity (ROE) > 15%
Q4: Is it better to buy one share of a ₹5000 stock or ten shares of a ₹500 stock? The number of shares you own is irrelevant. What matters is the quality of the business and the total amount you invest. If the ₹5000 stock belongs to a superior company with better growth prospects, it is a better investment than owning more shares of a mediocre company. Focus on the business, not the share count.
Q5: Are these low price high potential stocks India guaranteed to give good returns? No investment in the stock market is guaranteed. The stocks listed here have strong potential based on their current fundamentals and industry trends. However, their future performance will depend on market conditions, company execution, and economic factors. Always do your own research.