₹1 lakh turns to ₹1.19 cr in 20 years as PSU stock gave bonus shares 4 times
Stock market mogul Vijay Kedia believes that intraday trading is like milking out money from a bull. So, it’s better to be an investor than a trader because money is not in buying and selling of stocks but in wait. A long term stock investor not just gain from the rise in share prices but from various other rewards like bonus shares, stock split, dividend, buyback of shares, etc that a listed company announces from its capital reserves.
To understand how a long term investor can turn a lakh into crore and how bonus shares issued in between can help your money to grow many-folds, you need to look at
Container Corporation of India shares. This stat-owned stock has surged from around ₹25 to ₹635 apiece levels in last 20 years, delivering 2,450 per cent return to its long term shareholders. So, if an investor had invested ₹1 lakh in this PSU stock 20 years ago, its ₹1 lakh would have turned to ₹25.50 lakh. However, due to the four bonus shares announced in last two decades, an investor’s ₹1 lakh invested 20 years ago would have grown to ₹1.19 crore today.
Container Corporation of India bonus share history
As mentioned above, shares of Container Corporation of India Ltd traded ex-bonus on four occasions in last twenty years. As per the information available on BSE website, Container Corporation of India Ltd traded ex-bonus in April 2008, September 2013, April 2017 and February 2019. Container Corporation of India shares traded ex-bonus on 16th April 2008 for issuance of bonus shares in the ratio of 1:1. On 6th September 2013, Container Corporation of India shares once again traded ex-bonus for issuance of 1:2 bonus shares. On 5th April 2017 and 4th February 2019, the PSU stock once again traded ex-bonus for issuance of one bonus share for every four shares held by eligible shareholders of the company.
Bonus share impact
Twenty years ago, Container Corporation of India share price was around ₹25 apiece. So, if an investor had invested ₹1 lakh in Container Corporation of India shares, he or she would have got 4,000 CONCOR shares in one’s demat account. Later on company issued 1:1 bonus shares in April 2008 that tuned one’s shareholding to 8,000 without any investment. September 2013, PSU company issued 1:2 bonus shares, which turned one’s shareholding to 12,000 (8,000 x 1.5).
Similarly, one’s shareholding surged to 15,000 (12,000 x 1.25) after issuance of 1:4 bonus shares in April 2017. These 15,000 shares further surged to 18,750 after 1:4 bonus share issue declared in February 2019.
As Container Corporation of India share price today is ₹635 apiece, the absolute value of one’s ₹1 lakh would have become ₹1.19 crore today (18,750 x 635). So, these four bonus shares helped an investor’s ₹1 lakh to tune into ₹1.19 crore in twenty years.
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Ganesh
http://ganesh@finplay.inFinance enthusiast, Mutual fund expert.