Note: This article was originally published in April 2014 and has been updated with the latest numbers as of 2019.
If I had the technology to send a message back in time, I would tell my father in 1980 to “Use Rs.10,000 to buy 100 shares of Wipro as a one-time investment and never sell it for the next 40 years.” If he had done that his investment would now be worth about Rs.1200 crores. Yes, you read that right. Crores, not thousands or lakhs.
This is one of the common examples given when people come into investing in shares in India. Almost every Indian blog about investing in stock markets gives this example and I also post this here as requested by a reader. A lot of people think that it is a lie and don’t believe it, but it is possible and there are numbers to prove it.
Rs.10,000 to Rs.1200 Crores
Let’s just assume that you bought 100 shares of Wipro each at a face value of Rs.100 in the year 1980. Total investment: Rs.10,000. You don’t touch it at all, no profit booking or buying more shares. Occasionally companies provide benefits to its shareholders by way of corporate actions. They could provide bonus shares for shares that you hold, they could do a stock split where a high face value share would be broken down into smaller face value shares but the number of shares increases proportionately, etc.
Wipro has done various such bonuses and stock splits in its history of 1980-2017. Lets now see the different corporate actions and how the number of stocks would’ve grown.
|Year||Action||Number of Shares||Face Value|
|1980||Initial Investment||100||Rs. 100|
|1981||1:1 Bonus||200||Rs. 100|
|1985||1:1 Bonus||400||Rs. 100|
|1986||Stock split to FV Rs.10||4,000||Rs. 10|
|1987||1:1 Bonus||8,000||Rs. 10|
|1989||1:1 Bonus||16,000||Rs. 10|
|1992||1:1 Bonus||32,000||Rs. 10|
|1995||1:1 Bonus||64,000||Rs. 10|
|1997||2:1 Bonus||1,92,000||Rs. 10|
|1999||Stock split to FV Rs.2||9,60,000||Rs. 2|
|2004||2:1 Bonus||28,80,000||Rs. 2|
|2005||1:1 Bonus||57,60,000||Rs. 2|
|2010||2:3 Bonus||96,00,000||Rs. 2|
|2017||1:1 Bonus||1,92,00,000||Rs. 2|
|2019||1:3 Bonus||2,56,00,000||Rs. 2|
After the year 2019, there were no more bonuses or stock splits. But with just that initial investment of Rs.10,000 (100 shares) you now would end up with 2,56,00,000 shares of the company because of all the stock splits and bonus shares. The current stock price of Wipro is about Rs.469 per share, as of 18 April 2021.
Rs.469 × 2,56,00,000 = Rs.1200,64,00,000 or about Rs.1200 crores. That is a CAGR (Compound Annual Growth Rate) of more than 40%. Does any of your bank FD give you a 40% annual interest rate? It was all possible because of the free shares that the company gave to its shareholders as an incentive for investing in their company. If you immediately needed to liquidate this entire holding today (urgent need for >Rs.1200 crores?), you can do it and you would have to pay a very small long term capital gains tax on it (which was recently introduced).
How about an additional yearly payout of Rs.2.56 crores?
If you thought that Rs.741 crores out of a meager investment of Rs.10,000 were unbelievable, here comes another shocker. Every year the company announces dividends from its operating profits for its shareholders. As a shareholder, you would also get this benefit for how many ever stocks you hold.
For example, the past 4 years, the company announced Re.1 per share as dividends. So you get back Rs.2.56 crores just for holding the shares. Until recently dividends were also not taxed. But now any aggregate dividend above Rs.10 lakhs is taxed at 10%.
For a comparison, just calculate your (or your dad’s) current salary per annum and imagine getting a crore every year as additional income. How does this Rs.10000 investment compare to all the other money invested in other products like real estate or gold? No other investment would’ve given you such returns and dividends every year. If only my dad had the surplus money to invest in this.
Has anybody really done this? Can I go buy Wipro now?
As the saying goes “hindsight is 20/20”, we can calculate all this only after the company has grown from selling vegetable oils, soaps to becoming an IT major. Had everyone known that this cooking oil company would give such returns in 1980, everyone would have invested in this and become billionaires. Also, the shares wouldn’t have been listed on any exchange in 1980 and you would have had to invest privately into the company. Buying Wipro now wouldn’t give you the same returns as the company is already grown to such proportions and such a large-cap stock giving multi-fold returns is very hard.
How can I get returns like this?
There have been numerous such companies that have given great returns to investors, like Reliance, Titan, Dr. Reddy Labs, etc. No one can predict which company would grow to such a huge level before 30 years. Remember, for every story like Wipro, there are thousands of companies that have eroded investors’ wealth and become penny stocks. Investing in equities alone isn’t enough, investing in the right company at the right time is even more important.
Even if someone invested in the best company in the world, its basic human psychology to book profits when the stock prices increase so many folds. Some investors don’t feel comfortable even for a 50% increase in their investment. No one would have the patience to hold such a stock when he sees how volatile the market is in the short-term.
If you really want such phenomenal returns, you would have to do a lot of fundamental research, do your due diligence on the company and invest in it when it’s in the early stages. Most important of all is, staying invested in the company for the really long-term to reap the entire benefits.
- I have written another article that has 6 stocks that have been multi-baggers – and how I got a 23x return on my investment on one of those stocks.
- Read this if you want to understand about Bonus vs stock split and other corporate actions.
PROVIDE THE STOCK NAME AS WIPRO COMPANY
Being a retail investor, how anyone can get the share prices at face value????
[…] can read this blog by Get Richer and see exactly how the price of Wipro rose from Rs. 10000 to more than 700 crores in 40 years with […]
Iam buying the wipro stocks
I am a new investor I don’t now
About the company. Please suggest
Me .I should buy or not
wipro share price in 1980
I have invested in suzlon in the year 2005 holding 100 shares what will returns by 2025
I too had invested back in 2008/09 and it might never go back those levels again. It has become a meme stock.
yes it will never go now in future because currently the face value is half then that time,
If Rs 10,000 becomes Rs 741 crores, how much worth Azim Premji’s family should be? Assuming that they invested Rs 1 crore in 1980, they have Rs 741 crores X 1000 = Rs 7,41,000 crore.
No, something is wrong with your calculations…
Nothing is wrong , Premji is doing so many charities and donations only for this reason , his calculation is like an industrialist like Tata family not like other business men.
absolute right,azim sir donates his 75 % wealth, therfor he is not in the richest list,
its power of compounding
It isnt wrong because he hasnt hold all of his shares he would have sold some in between also rn the value will be even more coz shares will be 2.4cr and multiply it by 430 or whatever the price today And check bonus and split history in the 80s-90s even if he sold few shares that shares would be few million shares today!!
If Rs 10000 became Rs 741 cores, how much worth Azim Premji’s family should be? They must have invested Rs 1 crore at least. Shall we assume they are Rs 741 crores X 1000=Rs 7,41,000 crores?
No, something is fundamentally wrong with your calculations……
[…] How an Investment Of Rs 10,000 in wipro grew to Rs 741 crores in 39 years […]
i read ur article on niftybees..then i came across this 1….what about bonuses n dividents in niftybees? if any nifty50 company give 1+1bonus…shudnt that increase number of shares of niftybees .say by 1+1/50 times??also what about dividends?
How many ever bonuses or stock splits happen, the total value of the company remains the same.
If the company stock is Rs. 1000 and they announce a bonus of 1:1, the stock price drops to Rs.500. The value remains the same.
Check this article to learn about this – https://getricher.in/2017/bonus-stock-splits-rights-issue-buybacks/
The number of units you have of any ETF or Mutual fund is based on a weighted valuation of all the different stocks in the fund. So the value of your investment remains the same how many ever bonuses or stock splits happen.
If we have 10 shares of RS. 10/- each of Naval dockyard co-operative credit society limited bought in 1962 what would be the value today
I don’t think that stock is publicly listed/traded. You would have to contact the company and enquire about your stocks and the value.
Are you kidding? Check the Nifty listed and comment here.
I couldn’t find it. If you have the link to the NSE/BSE website for the company please share here.
i want srini contact number or mail address – i want to learn a lots from them
You can subscribe to the newsletter using your email address, and I will send a weekly update of the markets every Sunday. You can contact me through that email address.
It is very good for us learning, a profit margin was so high that we can not get this type of returns in business or gold or real estate.
Please share another examples that you have with you.
Check out this article https://getricher.in/2017/multibaggers-like-wipro-possible-today/ to learn about other similar multi-baggers.
I checked the calculations and not only it is correct but when updated to 2020, it works out much more because of another bonus of 2019 which is not in the above calculations.
HOW CAN I GET SUCH RETURNS?
We can not go back in time but we can develop the skills to identify new companies with such potential.
The only other investment which gave much bigger and faster return is Bitcoin. Till 2012, it was Rs 1 per bitcoin. It went upto $20000 in Dec 2018 and is still $8800.
Connect with me on markethive social media platform and you might benefit from my research. https://markethive.com/teamavm
Can Anybody help me for Reliance Industries Ltd.
I bought 10 Shares in the year 1987. I want to know as per Share splits and dividends what must be the value of my shares? How much dividends I shud get?
I bought 10 shares of reliance industries ltd iin 1980. I have not touched them yet. Now, i would want to know the number of Splits , dividends till date. Also what will the total shares value as of date? Can anyone help ??
Please check your CALCULATION of year 1997 BONUS 2:1 i.e 64000 share become 96000 share not 1,92,000 share????
2:1 bonus shares mean, for every 1 share you have, you will get extra 2 shares. So if you have 64000 shares, you will get an extra 128,000 shares. So total is 192000.
The calculation for arriving the number of shares is wrong. As per the actual calculation the total shares is coming to only 192000 and not 19200000.
The total value as on that is woking out to only 7.41 crores only and not 741 crores.
I have shown my calculations. I have rechecked it multiple times, across multiple sources. It is correct.
Can you show your calculations on how you got only 192000?
Then how can we find another wipro like as good company (profitable company)
Invest in fundamentally strong companies, stay invested for long time (more than 5-10 years).
There are many books and videos that teach you how to find such fundamentally strong companies.
any other such stories ??
Good information and very nice
is this real, i mean the numbers??? So are we telling that the valuation of wipro in 1980 was just about 45 Lakhs???
Hi, I had sent a reply to you regarding the wipro multibagger article . Have you recieved it ?
After much contemplation, post reading your original article regarding WIPRO multibagger scenario ,I have a few things to add,maybe call it as a new interesting perspective.
As per your article,from your perspective ,one buys WIPRO shares in [email protected] Rs.100, keeps it till 2014 with ref. to your original article, or lets say,as per your newer article with the selling year to be 2019,right ?…with the number of shares to be 1,92,000,000 x Rs.386/- = Rs 741 crores…right ? Definitely a mind boggling amount for anyone who has invested so less amount and getting such a mammoth returns. Agreed.
But, I feel, if it had been a choice for me, I would have made a higher amount than the one mentioned by you, that also 19 YEARS EARLIER(2000), WITH LESSER NUMBER OF SHARES IN MY HAND. Well, you might wonder how ???
I am sure you might be aware in the year 2000,after the Indian I.T.companies solved the Y2K issue all the major I.T companies saw their stock price soaring. WIPRO at that time was ruling the stock exchange with it’s shares rocketing from Rs.2,809/- on JANUARY 03,2000 TO Rs. 8,929/- BY FEBRUARY18,2000( @ FACE VALUE OF Rs.2/- !!!!!!
So, if I were to sum it right, with my 960,000 shares ( as per your calculation) in 1999, and sold it @Rs. 8929/- *** ….IN THE YEAR 2000, the amount would come to 857 CRORES !!!!!! PLUS THE DIVIDENDS ACCRUED TO ME FROM THE TIME OF MY INVESTMENT.
Which option do you think would have been a better decision… ?
Yours, (1) with 1,92,000,000(1.92 crores) shares till YEAR 2019
(2) Selling @ Rs.386/-
(3) Amounting to Rs. 741 crores
Mine (1) 962,000( nine lakh ,sixty two thousand only) shares TILL YEAR 2000
(2) Selling @ Rs.8929/-
(3) AMOUNTING TO Rs. 857 CRORES
*** THIS INFO IS FROM ” THE HINDU” – https://frontline.thehindu.com/static/html/fl1705/17051110.html
I hope this new perspective could give a more interesting twist to your findings. It was just a interesting article which intrigued me , and after doing some research got this tidbits of info from the net, so, thought of passing it on to you.
You may find it strange,maybe outright funny, that I have never dabbled in the stock exchange or the share markets.
Totally agree on your point that you could have gotten more returns if you have sold when it went to the all-time highs.
But the problem is in finding which is the maximum. No one can time the market. And human mind is fickle – when stocks are reaching new highs everyday, we keep trying to hold it on without exiting.
Like I mentioned in the article, past historical data is completely different from what would happen in real life. Hindsight is always 20/20.
The takeaway from this article should be how investing in a strong company would get better returns than any other asset class.
can i get your mail id
In year 1997 wipro share will increase to 96000 only because ratio is 2:1 not 1:2. Please check
2:1 bonus means, for every 1 share you hold, the company gives 2 extra shares, leading you to have 3 total shares.
That’s why 64000×3 = 192000.
Check out this article to learn more about bonus, splits, etc., https://getricher.in/2017/bonus-stock-splits-rights-issue-buybacks/
My father had invested in 1998 in IPCL , we have 240 physical shares of IPCL still. how to convert them into Demat. he also had 300 reliance petroleum limited shares in 1995? what should be its value now. and how can i convert into Demat.
Good information for us.
LOOK IT WITH CARE
It does work out to 535crs…
The more practical way to see it would be…
Perhaps their IPO was in 1991 and I invested Rs10000 @333 and got 30 shares before the 1992 bonus. Neither do I know the IPO date or price.
I would still have about 1.1crs, today. Of course it is a piddly amount as compared to 535. But, a retail investor would have some or all of the following constraints:
1) It would’ve been 10 months average salary to invest.
2) How can I make a private investment… knowing nothing about the company… especially based not in Western India… in fact, I did a private placement in a company and they ate it away…
3) Even if I had… Wipro were less than a rupee, i understand, in mid periods…
PRACTICALITY HAS TO BE FACTORED IN, NO?
It’s financial magic with reality need only long term vision as life mission
It is increadible but it be & good information for us
How that calculation end up in total no of shares as 96,00,000.
5760000+ ((2/3)*5760000) = 9600000
Unbelievable. . But have to believe now… as increment in the value of investment was 534720 times which is more than tremendous! !!!
[…] (This article was initially aired on getricher.in) […]
i think share market give return on by luck and chance . if we investment in A grade share and invest for Long term then we can do it…..
on your best guess, which is one or few company has similar potential .. in todays market.. .. what is equivalent amount of 10000 on todays terms.. ..
[…] http://getricher.in/2014/investment-of-rs-10000-to-rs-535-crores-in-34-years/ […]
Its better to go with Large cap company . There are many company since 1980’s those have vanished from the stock market , you need to review your portfolio from time to time .
There appears to be some fallacy. Is wipro giving a dividend of Rs 7 on a share of face value 2. All the calculations do not show the face value of the share.
Yes, at least at the time of writing this originally, they were giving 350% dividend on a Rs.2 FV share.
All this information is available publicly.
I have also updated the article with latest numbers and added the Face Value of the stock in the table.
[…] back a nice fat cheque (of Rs. 6 crores) tax-free every year is a good enough reason, if you ask me. And as long as the government uses all […]
[…] stay invested, the better your returns are. The famous example always given is “if you bought 100 shares of Wipro for Rs. 100 each (Rs. 10,000 investment) in 1980s, it would’ve grown more than Rs. 395 crores […]
[…] is a saying “The best time to invest was Yesterday (or last year or 34 years back). The second best time to invest in today.” I have already shown you examples of how starting […]
That was awsome and thanks much for the detailed explanation for the insight … Great ….