A Simple Calculation About Infosys
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A Simple Calculation about Infosys

 
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Investment Consul...
The Growth Potential in Share Market

We everybody knows that the share market will give very good return in the long term.

One simple calculation about the “Amazing Growth of INFOSYS”

We all know about the growth story of Infosys. How about the stock? Lets find out.

Infosys was founded by Mr.Narayana Murthy along with some others in 1981. It came with an IPO in 1993 at the price of Rs. 95.

Everybody who are all applied got the shares. Many missed the Diamond opportunity by not applying.

Suppose one person is applied for 100 Shares. It would cost him Rs. 9500 in the year 1993.

Let us assume that he is holding the same position till today. What will be the value now?

Let us Guess the current value 1 Lacs or 2 Lacs.

Let us calculate and findout.

Remember that in these 13 years Infosys would have offered many dividends.
Let us keep this aside and calculate the value of shares alone. Soon after IPO, Infosys gave 1:1 bonus in 1994.
So, our 100 shares will be 200 in 1994. Again they gave 1:1 bonus in 1996.
That will take the count to 400 shares. And again in 1998 they offered bonus of 1:3 shares. That will take our count to 1600 shares.

In 2000, they split the stocks (Rs. 10 FC to Rs. 5 FC). This will take our count to 3200 shares. In 2004, again they announced 1:1 bonus. It will take our count to 6400 shares.

Today(11/11/2006), I checked the CMP of Infosys. Its Rs. 2300. So, what will be the value of our shares?

6400 x 2300 = Rs. 1,47,20,000. Yes, its 1.47 Crores.

The investment is grown by 1500 times in just 16 Yrs.

What other investment would have taken to this level? Real-Estate? Bank Deposit? Gold? I don't think so.

A Bank deposit of Rs. 9500 in the same year at the rate of 12% would have hardly fetched us Rs.38,000 by this time.
If the same is in Real Estate means Rs.9500 may be 10 Lacs.

Even though ups and down are present in the share market, long term investment in good companies will give substantial growth for our investment.

The share market and share market related instruments like Mutual Funds, ULIPs will give the good growth in the long term.

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