27. December 2006

Infosys Share in 1993 would Make ………

We all know about the growth story of Infosys. How about the stock? Lets
find out. Infosys was
founded by Narayana Murthy along with some others in 1981. It came with an
IPO in 1993 at the price
of Rs. 95. Everybody who applied got the shares. Many missed the Diamond
opportunity by not

applying. Suppose that a person applied for 100 Shares. It would cost him
Rs. 9500. Let us assume
that he is holding the same position till today. What will be the value
now? Let us calculate.
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, Infy 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. Recently, two months
back they gave bonus shares in the ratio of 1:1. Now, the count of ours
would be 12800.
On 13/10/2006, I checked the CMP of Infosys. Its Rs. 2070. So, what
will be the value of our
shares? 12800 x 2070 = Rs. 2,64,96,000. Yes, its Two Crores Sixty Four Lakh
and Ninety Six Thousand
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.

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