Why Shareholders of Infosys are called CROREPATIs?

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You might have heard this many time, my friend bought Infosys shares when it was Rs.10/- and now he is a CROREPATI. But you would always have wondered how is it possible?

He had invested just Rs.10,000/- for 1000 shares and today the share value is Rs2,300/-.
Then his total capital is Rs.23,00,000/-
He is a Lakhpati and not a crorepati!!!!

Right?

No you are WRONG here.

Wondering HOW??

You need to understand the most important principle of EQUITY MARKET here.
And that is "STOCK SPLIT".

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See when you own a share of Infosys, you are a business partner to Infosys and hence company can share their profits with you based on their performance and the management decision to pass on the benefits to its share holders.

They usually reward by giving BONUS shares (extra shares) or STOCK SPLIT.
When they split the stock, the FACE VALUE of the STOCK comes down and the total value of the STOCK will still remain same.

Let me explain you with example.
Assume you had 1000 share of Infosys, which you had bought @ Rs.10/-
PS: Face Value of Infosys was Rs.10/- but the issue price was with premium of Rs.85/-, which was under subscribed.

Company declares - STOCK SPLIT 1:2
Then your total stocks doubles, so you will have 2000 shares now.

When this is done, the stock prices also comes down almost by 50%.

The Infosys company once was trading @ Rs.20,000/- per stock. Infact if you currently calculate at that rate, for the person who had bought stocks @ Rs.10/-. With multiple stock splits and bonus the company has given, each stock is valued more than Rs.1,00,000/-

WOW!!!!!!!!!!!!!

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Now do you understand, why INFOSYS shareholders are CROREPATIs.

If you ask me, should i invest in INFOSYS today and expect the same thing in the next 10 years, the answer is NO.

You should look for company which are going to be the FUTURE INFOSYS to reap that kind of benefits. If you are keen on investing in such stocks, subscribe to our PAID SERVICE at the top and look for Portfolio Management or Multibagger Stocks. For more information, email to nsebsestocktradingcalls@gmail.com


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