November 17 ie today MRF shares were trading at 87,949.15. But you will be shocked to know that once the price of one share of MRF was just Rs.11. MRF is the most expensive stock in the Indian stock market today and investing in it is not within everyone’s reach. So what is the reason why MRF shares are so expensive?
MRF shares investors millionaires
According to a Business Today report, on April 27, 1993, one share of MRF was priced at Rs 11. But the same stock reached its all-time high on November 7, 2022 and the share price reached 96,000. In these 29 years, the company has given strong returns to its investors. In simple terms, if one had invested Rs 1 lakh in MRF 29 years ago, it would have been worth around Rs 78 crore today.
Why are MRF shares so expensive?
Now you must also be thinking that why the price of MRF share which makes investors millionaires is so much? The reason behind this is that there is no share split. According to Angel One, MRF has not split its shares since 1975 till date. Earlier, MRF had issued bonus shares in the ratio of 1:2 in 1970 and 3:10 in 1975.
Whatever the reason, many people believe that not splitting stocks keeps investors engaged for a long time.
One share in Warren Buffet’s company is worth crores
Famous businessman and American investor Warren Buffett has also advocated not to run out of stocks. The stock of Berkshire Hathaway, Warren Buffett’s company, is also a result of this. The price of one share of Berkshire Hathaway Class-A is about 4.70 lakh US dollars. In terms of Indian rupees, the price of one share is around Rs 3.7 crore.
What is a share split?
When the share price is high, retail investors are reluctant to invest in it. In such a situation the company splits the shares. Suppose the price of one share of a company is Rs 1000 and there are a total of one lakh shares of that company in the market. Now the company has split the shares and made a total of two lakh shares, so the price of one share will come down to Rs.500. Similarly, if 1 lakh shares are split into 10 lakh shares, the price of 1 share will be Rs.
What is the business of MRF?
The full name of MRF is Madras Rubber Factory. The company started in 1946 as a manufacturer of toy balloons. They started making tires from 1960. And now this company has become the largest tire manufacturing company in India. The tire industry market in India is around 60,000 crores. JK Tires, CEAT Tires etc. are competitors of MRF.