How can you make portfolio with small ticket size companies with less than Rs 200 share price?

If you are  looking for low-priced, good shares, then, you can look at these shares priced below 200 rupees. We will also guide you how to evaluate these shares.

Most of these shares are of mid-size companies such as HUDCO’s share price is 74.70 rupees, IOC’s price is 89 rupees, GSFC’s one share price is 175.80 rupees, Rain Industries is at 162.40 rupees and Manappuram Finance’s one share is trading at around 154.30 rupees.

These companies have been selected on the basis of PE i.e. Price to Earnings Multiple. To calculate PE, the price of a company’s share is divided by EPS i.e. Earnings Per Share. The EPS can be taken for the past 12 months or one financial year. It can also be taken for the next 12 months or the next financial year. These five shares are trading at PE of less than 10 in the last 12 months.

Many multiples can be used to assess the valuation of any share. Therefore, in addition to PE, these shares have also been evaluated on the basis of PBV i.e. Price to Book Value Multiple. To calculate PBV or Price to Book Value, the price of a company’s share is divided by its book value. Book value is the total value of a company’s assets. For any share, a PBV of less than one is considered better in terms of valuation.

The third thing you need to check is the dividend yield, i.e. how much dividend these shares are giving in proportion to the share price. For example, if you buy a share for 150 rupees and get a dividend of 15 rupees in a year, then, the dividend yield of that share is 10 percent.

Similarly, some of the cheaper banking shares are Bank of India, PNB, Union Bank, Bank of Baroda and Federal Bank. These shares are trading at or around PBV of less than one.

Arun Mantri, founder of Mantri Finmart, said “In terms of good dividend yield, IOC, GSFC and Rain Industries can be chosen. One can also choose banking shares such as Union Bank, Bank Of Baroda and Federal Bank. ” In addition, he also mentioned some other low-priced shares. According to him, in non-banking stocks, NALCO and L&T Finance can be included in the portfolio. If you want to invest only in banking stocks, then IDFC First and Bank of Maharashtra can be invested with a perspective of 2-3 years.”

So if you also want to create a portfolio of cheap and good shares priced below 200 rupees, then, invest with a perspective of at least 2-3 years keeping in mind the shares as suggested by Arun Ji.