Madras Rubber Factory (MRF) is the largest tyre brand in India and holds 6th position in the world market. K. M. Mammen Mappila founded MRF in 1946. The giant went public in 1990 with the face value of just Rs 10 per share, and today its LTP (last traded price) is Rs 71,385.90. You can imagine the happiness of those investors who held these stocks from the beginning.
MRF Share Price History 1995 -2022
How did MRF go from Rs 10 to Rs 98,599 (52 weeks high)? Let’s look at its price history year on year, and at the end, we will read a story of an investor who was made a millionaire like a dream.
Year Share Price (1st January)
- The share price of MRF was just Rs 320 in 1990.
- The market cap of MRF is Rs 31,116 cr
- The stock is listed in two major stock exchanges (NSE & BSE)
This is a natural question that every trader must have in their mind. The reason is simple MRF never gave a split to their stockholders.
What is a split?
Generally, many companies split their stocks to keep the value in the range of a new investor. If they do not do so, then the stock will be out of the reach of many investors because of its higher price.
What is Split Mechanism?
Just take an example of any stock. If the price of that stock is Rs 100 and it gave split, and the ratio of that split is 1:4, then the first thing is that the number of stocks you have will be multiplied by 4. E.g., you have 300 quantities of that stock; then it will increase to 1200. The second change will come at its price. The price will be divided by 4, making it four times lower than its original price; in your case, it will be Rs 25.
Splits don’t give you monetary benefit immediately. However, they increase your number of stocks, which will benefit you when you get dividends according to the holding quantity.
I hope you get to know why MRF is so expensive, so you see the actual price.
MRF is looking far ahead. MRF is planning to reduce carbon emissions by developing low-rolling-resistance tires. This will positively impact its share price because investors are critically monitoring those manufacturing companies that are compliant with the environment.
Since environmental degradation is a big concern for policymakers worldwide, those companies that are changing their operations to save the environment benefit from tax rebates.
This action will positively impact its shareholders, too, because stock prices are bound to hit a new high shortly.
A guy named Ravi called up Zee Business to inquire about the value of his MRF stocks, which his grandfather had repurchased in 1990 worth Rs 20,000; his grandfather went into a coma due to an accident. To his great surprise, the news anchor told him that the total value of his stocks is Rs 130 crore as of now.
This has exemplified the rewards attached to being patient in the stock market. I hope this will clear your understanding of the value of holding a stock for a long time.
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