MRF Ltd. has been the perfect wealth multiplier for its investors over the past two decades.
From trading at Rs 11 in 1993 to touching Rs 90000 in 2021, what investors are getting is an 8,00,000% return on their capital.
What more can one expect from such a return on their investment!
We all have heard the famous Wipro story: Rs 10,000 invested in 1980 would be worth Rs 550 Cr in 2020. Wipro has grown rapidly and issued various bonus and splits to its investors. Back then, Wipro had issued 45,334 shares, but today, it has 451cr shares. With market cap of 245,902 Cr, if you divide it with the original shares issued, per share would be worth Rs 5.42 Cr as compared to Wipro’s CMP of Rs 430 (Jan, 2020).
In MRF’s case, it has never done any stock split or issued any bonus shares to its investors since 1975. First bonus was given in 1970 (3:10) and second was given in 1975 (1:2).
Why is MRF not splitting its shares?
Madras Rubber Factory(MRF) is an Indian Multinational tyre manufacturing company and the largest manufacturer of tyres in India, also the sixth largest manufacturer in the world.
What many market analysts believe is, the promoters do not want to increase the shareholder base. They only require serious investors who are willing to invest at the price and stick to it for the long term. This will keep small retail traders away. With limited public shareholding, they can make quick decisions.
So now the question lies, will MRF reach Rs 1,00,000 within the next 2-3 years?
As of current data, MRF Stock price has a
1 Year CAGR of 28%
3 Year CAGR of 28%
5 Year CAGR of 19%
10 Year CAGR of 29%
At 90000, MRF needs only 11% up move to cross the 1,00,000 milestones.
It took around 3 years to cross its previous all-time high which it made in 2018. With the current bull market rally, MRF would take around 1 year to 1.5 year to touch Rs 1,00,000 mark.
So Yes! MRF would be the 1st company in Indian Stock Market History to reach this milestone!
Fun Fact: 1 share of
Berkshire Hathaway Class A is $3,52,474.00 (2,57,57,742.50 Rupees)
Berkshire Hathaway Class B is $234.33 (17,124.13 Rupees)
Berkshire Hataway Inc. is an American Multinational Conglomerate, the company of famous value investor Warren Buffet. (All data is as of 20/01/2021)
Thank You for Reading.
Finance graduate with a strong desire to understand the complexities of financial markets. I make financial judgments for my investments based on the information I gained during my academic education. I write articles about financial literacy for dstreetanalyser.com in order to promote financial literacy among the general public.