Value investing, first proposed by Benjamin Graham and popularized by Warren Buffett, is the business of picking stocks that are cheap relative to their fundamentals. Viewed in the Indian context, some of the best shares under 500 offer affordable investment opportunities for investors seeking growth or value opportunities in the stock market. While they provide accessibility and potential for higher returns, these stocks also come with risks such as volatility, quality concerns, and liquidity issues.
If you are looking to invest in ideal shares under 500, do your research thoroughly. Evaluate the company’s financial health, market position, and growth prospects. Investors need to exercise caution when investing in these lower-priced stocks as they should always compare their financial goals and tolerance to risk. Join us as we take you on a personal, guided tour of these hidden gems in the Indian stock market.
Best stocks under ₹500 on a five-year CAGR basis
Best shares under 500 in the Indian stock market lower the entry barrier for newbie retail investors. Potentially large profits, opportunities for diversification, affordability, and the chance to partake in the growth of start-up businesses are among the advantages.
| Name | Mar Cap Rs.Cr. | P/E | Revenue CAGR |
| NTPC Ltd | ₹ 4,17,345 Cr. | 19.5 | 12.2% |
| Oil and Natural Gas Corporation Ltd | ₹ 3,71,369 Cr. | 8.15 | 7.0% |
| Power Grid Corporation of India Ltd | ₹ 3,15,105 Cr. | 20.1 | 4.9% |
| Indian Oil Corporation Ltd | ₹ 2,38,266 Cr. | 7.73 | 8.0 % |
NTPC Ltd
India’s largest power generation company with electricity generation and distribution being its principal activity is NTPC Ltd. With a diversified portfolio of thermal, hydro and renewable energy projects, NTPC’s role in the country’s energy security is vital.
Oil and Natural Gas Corporation Ltd
Oil and Natural Gas Corporation Ltd (ONGC) is India’s largest exploration and production oil and gas company. Hydrocarbon exploration on land and in the water is one of its important functions to meet the country’s energy requirements. ONGC produces electricity, refines oil, and also works in producing renewable energy. ONGC is among the best stocks to buy under 500 in India.
Power Grid Corporation of India Ltd
Power Grid Corporation of India Ltd, a government-owned electric utility company, supplies about 50% of India’s total generated power. In Rajasthan and Goa, it has state-of-the-art plants and it operates the country’s largest transmission network.
Indian Oil Corporation Ltd
The biggest oil marketing and refining firm in India is Indian Oil Corporation Ltd. (IOCL). IOCL is a vital component of the Indian energy basket; it provides gas, petrochemical products, and petroleum goods and services.
Best stocks under ₹500 on a profit margin basis
Investors can find the best stocks to invest in India which also have high net profit margins. The lower market price of these stocks indicates that these stocks have the potential to deliver high profits.
| Name | Mar Cap (Rs.Cr.) | P/E | 5-yr operating profit margin |
| ITC Ltd | ₹ 6,05,430 Cr | 29.6 | 23% |
| Fineotex Chemical | ₹4,386.83 | 35.70 | 21.80% |
| Likhitha Infrastructure | ₹1476.60 | 21.95 | 21.75% |
| BLS International | ₹5,497.18 | 43.26 | 15.23% |
ITC Ltd
Investors prefer ITC Ltd, which is diversified into FMCG, hotels, paperboards and agribusiness. The presence of ITC in the consumer goods segment and in the tobacco industry is strong. It is a company that is known for good dividend payouts, and it is a stable company in the Indian stock market.
Fineotex Chemical
Fineotex Chemical Ltd manufactures over 400 speciality chemicals and enzymes for textile, garment, construction, leather, agrochemicals, adhesive and water treatment industries. The company has manufacturing facilities in India, located at Mahape, Navi Mumbai, and a Malaysian facility located at Bander Baru Bangi with a combined production capacity of 22,000MT/p.a. The firm has a global presence across 33 counties and caters to well-known companies in India and overseas. The company is engaged in the business of manufacturing and trading of textile chemicals, auxiliaries, and speciality chemicals.
Likhitha Infrastructure
Likhitha Infrastructure is engaged in the business of laying gas supply pipelines and irrigation canals, building bridges over the canals, and related maintenance works. The company’s operations include three principal business lines namely, Cross Country Pipelines and associated facilities, City Gas Distribution including CNG stations, and Operation & Maintenance of CNG/PNG services.
BLS International
BLS International Services Limited, incorporated in November 1983, is a specialist provider for outsourcing of visa, passport and attestation services to client governments across the world. BLS serves the diplomatic missions by managing all administrative and non-judgmental tasks related to the entire life cycle of a visa application process, enabling missions to focus entirely on key aspects of assessment in visa application and conduct interviews, where required; BLS assists in scheduling interviews.
Best stocks under ₹500 on ROE basis
The best stocks to buy under 500 are those that generate high returns from shareholders’ equity and are some of the best ones based on the return on equity (ROE) metric. They are financially healthy, have sustainable growth, and reinvest profit very efficiently.
| Name | Share Price | P/E | ROE % |
| Trf Limited | 486 | 14.32 | 45.21 |
| Coal India | 490.7 | 8.39 | 45.21 |
| Black Box Ltd | 484.95 | 40.68 | 35.66 |
| JK Paper Ltd | 498.05 | 9.11 | 22.13 |
All data as of Oct. 17, 2024
Trf Limited
Promoted by TISCO, ACC, Hewitt-Robbins (US) and General Electric (UK), TRF Ltd, formerly known as Tata-Robins-Fraser, was incorporated in November 1962. The company undertakes turnkey projects of material handling for the infrastructure sector such as power and ports and the industrial sector such as steel plants, cement, fertilisers and mining. It is also engaged in the production of such material handling equipment at its manufacturing facility at Jamshedpur. Further, it is engaged in providing services relating to design and engineering, supervision etc.
Coal India
Coal India Ltd is the world’s largest coal producer which supplies coal to meet India’s increasing energy requirements. It is a government-owned company.
Black Box Limited
Black Box Ltd (Formerly known as AGC Networks Ltd) was incorporated in August 1986. The firm is an IT solutions provider delivering cutting-edge technology solutions and world-class consulting services to businesses around the globe.
JK Paper Ltd
JK Paper Ltd (formerly known as Central Pulp Mills), a member of HS Singhania Group, is originally promoted by Parkhe Group of Pune to manufacture paper and paper products. The company was incorporated in July 1960. The firm is India’s largest producer of branded papers and a leading player in Coated Papers and High-end Packaging Boards. It has two integrated Pulp and Paper Plants at Strategic Locations Unit JKPM in the East (Rayagada, Odisha) and Unit CPM in the West (Songadh, Gujarat).
Best stocks under ₹500 on ROCE basis
Return on capital employed (ROCE) is a useful metric for selecting quality companies and helps you choose the company that uses its capital efficiently and provides a good investment opportunity.
| Name | Mar Cap Rs.Cr. | P/E | ROCE % |
| ITC Ltd | 616,875 | 30.17 | 36.02 |
| Chambal Fertilizers | 20,092.7 | 14.5 | 22.51 |
| Tembo Global | 543.86 | 30.69 | 20.73 |
| Rail Vikas Nigam | 99,976.7 | 68.7 | 16.91 |
ITC Ltd
ITC Ltd is one of India’s leading private sector companies. ITC has a diversified presence in Cigarettes, Hotels, Paperboards & Specialty Papers, Packaging, AgriBusiness, Packaged Foods & Confectionery, Information Technology, Branded Apparel, Personal Care, Stationery, Safety Matches and other FMCG products. While ITC is an outstanding market leader in its traditional businesses of Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports, it is rapidly gaining market share even in its nascent businesses of Packaged Foods & Confectionery, Branded Apparel, Personal Care and Stationery.
Chambal Fertilizers
Chambal Fertilisers and Chemicals Limited was incorporated on May 7, 1985 and promoted by Zuari Agro Chemicals. The company has two business segments viz. Fertilisers and other Agri-inputs and Shipping. The firm manufactures Urea in its three plants located at Gadepan, District Kota, Rajasthan with an aggregate annual production capacity of around 3.4 million Metric Tons (MT). It markets other fertilisers and agri-inputs such as Di-Ammonium Phosphate (DAP), Muriate of Potash (MOP), Ammonium Phosphate Sulphate (APS), different grades of NPK fertilisers, Specialty Plant Nutrients, Sulphur, Micronutrients and Agrochemicals.
Tembo Global
Tembo Global Industries Limited was formally incorporated as a private limited company under the name ‘Saketh Exim Private Limited’ on June 16, 2010. Subsequently, the status of the company was changed to a public limited company and the name was changed to ‘Saketh Exim Limited’ on December 19, 2017. Led by the promoter Sanjay Patel, the firm is an industrial powerhouse with a dominant presence in the manufacturing and fabrication of metal and steel products used in Pipe Support Systems, Fastener Solutions, Anchors, HVAC Systems, Anti-Vibration Systems and Equipments for Industrial, Commercial, Utility and OEM Installations.
Rail Vikas Nigam
Rail Vikas Nigam Limited was incorporated in New Delhi as a public limited company on 24 January 2003. The company was issued its Certificate of Commencement of Business on February 18, 2003. Further, the firm has been conferred the status of Schedule A – Public Sector Enterprise’ and a Navratna Company, effective May 1, 2023.
Best stocks under ₹500 on a free cash flow (FCF) basis
FCF can also be a parameter for evaluating value stocks priced under Rs. 500.
| Name | Mar Cap Rs.Cr. | P/E | Price to FCF |
| VST Industries | 6,369 | 23.5 | 233.70 |
| Vinyl Chemicals | 688 | 29.5 | 64.98 |
| ITC Ltd | 6,11,121 | 30.0 | 42.08 |
| Castrol India | 21,840 | 24.6 | 31.02 |
VST Industries
VST Industries Ltd (the erstwhile Vazir Sultan Tobacco Company) was incorporated on November 10, 1930 in Hyderabad. It has 2 manufacturing facilities in Hyderabad and Toopran and 6 regional offices in Hyderabad, Mumbai, Delhi, Kolkata, Chennai, and Guwahati. It is presently engaged in the manufacture and trading of cigarettes containing Tobacco and Tobacco products.
Vinyl Chemicals
Incorporated in 1986 as a public limited company, Vinyl Chemicals manufactures vinyl acetate monomers (VAM). It was promoted by the Parekh group—a well-known group which manufactures and sells the Fevicol brand of adhesives, synthetic resins, binders, surfactants, pigments, etc — and SICOM, a Government of Maharashtra enterprise. The Company is engaged mainly in trading Vinyl Acetate Monomers. This best share under 500 has performed well as its revenue has grown steadily over the years.
ITC Ltd
ITC Ltd is one of India’s leading private sector companies. ITC has a diversified presence in Cigarettes, Hotels, Paperboards & Specialty Papers, Packaging, AgriBusiness, Packaged Foods & Confectionery, Information Technology, Branded Apparel, Personal Care, Stationery, Safety Matches and other FMCG products. While ITC is an outstanding market leader in its traditional businesses of Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports, it is rapidly gaining market share even in its nascent businesses of Packaged Foods & Confectionery, Branded Apparel, Personal Care and Stationery.
Castrol India
Castrol India Limited was incorporated in the year 1979 as a private limited company under the name of Indrol Lubricants and Specialities Pvt. Ltd. The company is a part of Castrol Limited UK (part of BP Group). BP, through its wholly owned subsidiary, Castrol Limited UK, holds a 51% stake in Castrol India. It is engaged in the business of manufacturing & marketing of automotive and industrial lubricants and related services. It has three manufacturing plants located at Patalganga in Maharashtra, Paharpur in West Bengal, and Silvassa (Union Territory).
Conclusion
To be sure, investing in some of the best shares under 500 in India holds opportunities for both newbies and experienced investors. The good thing about these stocks is that they offer retail investors access to high-growth potential companies at a cheaper price point. However, it is important to study market trends, company foundations, and sector efficiency while conducting research. If investors stay well informed and follow a disciplined investment strategy, they could profitably navigate the vibrant Indian stock market through these budget-friendly stock options.
