Stock markets offer excellent returns when one can buy a stock at much lower valuations. And, such low valuations are usually seen when there is panic in the market or there is a string of bad news about a company.

Reliance Infra and Reliance Capital are two flagship companies of Reliance Anil Ambani Group (ADAG) and as the group is facing high debt, both these stocks have declined in the recent months. Reliance Infra and Reliance Capital are profit-making businesses but they have high debt. The companies have been servicing their debt but as Reliance Communications and other group companies have been suffering due to mounting debts, investors are highly concerned about Reliance Infra and Reliance Capital as well.

So, investors having high-risk appetite can look at both these stocks. Reliance Infra has paid interest of Rs 4,571 crore last year. The company reported a loss of Rs 2427 crore last year. If the company manages to reduce its debt, the stock can bounce back. It might take few years for Reliance Infra to improve its balance sheet. The stock has 52-week high of Rs 489 and a low of Rs 37. The stock ended the last trading session at Rs 57.

McLeod Russel is another interesting story with high debt. The largest tea producer in the world has planned to reduce its debt from Rs 1031 crore to a comfortable range of Rs 200 crore. However, the management has been slow in reducing debt. The stock has suffered nearly 90% decline in its market capital over the last one year. McLeod Russel management aims to reduce debt by selling some of its tea estates. The company is planning to expand in marketing while reducing the production base with lower number of tea estates. The stock has faced panic-selling. With current level of Rs 17, investors with high-risk appetite can consider this stock for long term. McLeod Russel will announce its yearly results and debt reduction numbers on June 29. It will be good to take a call on the stock after clarity of debt levels.

PC Jewellers has witnessed more than 90 percent decline in its stock valuation. The company has been leading in many markets in branded gold and diamond jewellery but the stock has declined as investors were concerned about management issues. The company reported massive loss during the last financial year but the major decline in its stock valuations puts the company at interesting valuations. Investors with long term view and high risk appetite can consider PC Jewellers in their portfolio.

Please conduct due-diligence before making investment decisions.