Jul 16, 2015

Rs 2500 becomes Rs 60 Lakh in 22 Years - Must Read

Motherson Sumi came out with IPO @ 25 INR per share in April-1993. Initial investment of only 2500 INR on 100 shares became ?????????
You may be read this wealth creation example in social media, but I want to share this analysis with all of you. 

Last month Motherson Sumi announces 1:2 Bonus on June 2015.
See the bonus history how wealth created in this stock ????
1997-98: Bonus 1:2 - 100 share became 150 shares
2000-01: Bonus 1:2 - 150 share became 225 shares
2002-03: Split Rs.10 in to Rs. 5 - 225 shares became 450 shares
2003-04: Split Rs. 5 in to Rs. 1 - 450 shares became 2250
2004-05: Bonus 1:2 - 2250 share became 3375 shares
2007-08: Bonus 1:2 - 3375 share became 5062 shares
2012-13: Bonus 1:2 - 5062 share became 7593 shares
2013-14: Bonus 1:2 - 7593 share became 11389 shares
So 100 share became 11389 shares. Current market value of 11389 is 59,67,836 INR (Around Rs. 60 lakh Only). 
11389*Rs. 524 (current stock price)= 5967836 INR (Dividend not calculated here)
So Total value of invested Rs. 2500 in IPO became 59,67,386 as on 16 July, 2015. It's more than 2300 times increase in Investment value in 22 years!!!!!

If a Business does well, the stock eventually follows - Warren Buffet

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