Reliance Industries: The Journey of 1995 Shares to 2023

Reliance Industries: The Journey of 1995 Shares to 2023

Investing in the stock market is a journey that can span decades, during which time the value of your shares can rise or fall dramatically. This article explores the performance of Reliance Industries (RIL) shares purchased for Rs 10,000 in 1995, and how they have evolved up to the present day.

Understanding Reliance Industries' Stock Split and Historical Performance

Reliance Industries Limited (RIL) has a rich history in the Indian stock market, undergoing several stock splits and bonus issues over the years. A crucial event was the 1:1 bonus issue in 2001, which doubled the number of shares owned by investors. This historical context is vital to understanding how the share value has grown over time.

RIL's share price has experienced significant growth since its 1995 initial public offering (IPO), opening at Rs 35 per share. By August 2023, the share price was approximately Rs 2400, showcasing a 68.57-fold increase over the initial purchase price.

Calculating the Current Share Value

To determine the current value of Reliance Industries shares purchased in 1995 for Rs 10,000, we need to consider the share price, number of shares, and any stock splits or bonuses.

Initially, if the shares were purchased at an average price of Rs 55 per share, the number of shares would be: Rs 10,000 / Rs 55 181.82 shares (rounded to two decimal places). After the 1:1 bonus issue in 2001, the number of shares would double: 181.82 shares * 2 363.64 shares (rounded to two decimal places). If we assume no additional splits or bonuses by August 2023: The value of these shares would be: 363.64 shares * Rs 2400 per share Rs 872,736 (rounded to the nearest Rupee).

This means that if you had invested Rs 10,000 in Reliance Industries shares in 1995, their value in August 2023 would be approximate to Rs 872,736, not accounting for any taxes or fees.

This significant growth illustrates the power of long-term investment in a company that has shown sustained profitability and market leadership.

Investment Strategy for Young Investors

Investing in the stock market can be a long-term strategy, but not all stocks offer the same potential for returns. Here are three relatively low-market-priced stocks that young investors might consider:

1. IDFC FIRST BANK: Current Price at 62

For those looking for a modest investment, IDFC FIRST BANK offers shares at Rs 62 each. Investing in such a stock with a lower initial price could potentially yield higher returns over time when held for a longer period.

2. Jyoti Resins: Current Price at 1200

Jyoti Resins, with a share price of Rs 1200, targets those willing to invest larger sums for potentially higher returns. This stock is a good example of taking risks for potentially higher rewards.

3. Nykaa: Current Price at 167

Nykaa, with a share price of Rs 167, is another option for young investors looking to diversify their portfolios. Holding onto these shares for 5 years or more could yield significant returns based on past performance and growth potential.

Investing Rs 1 lakh in each of these stocks could result in returns in excess of crores over a 5-year period, although it is crucial to thoroughly analyze the market and the companies before making any investment decisions.

Reliance Industries: Unveiling the CAGR Calculation

Reliance Industries' stock has provided an annual compound annual growth rate (CAGR) of 17%. This means that if you had invested Rs 10000 in Reliance in 1995, it would have grown to approximately Rs 7 lakh by 2023. This is an impressive growth rate, especially when considering the initial investment amount.

Through the power of compounding, if you had made a Systematic Investment Plan (SIP) of Rs 10000 per year starting in 1995, the value today would be close to Rs 7 crore. This exemplifies the power of regular investments over a long period, showcasing how compounding can significantly increase your investment returns.

Remember, stock market investments carry risks, and it is crucial to conduct thorough research and consult with financial advisors before making any investment decisions.

Conclusion

Investing in Reliance Industries shares in 1995 has proved to be a worthwhile strategy, with a significant return estimated at Rs 872,736 by August 2023. For young investors, it's important to diversify portfolios and consider stocks with current lower market prices, such as IDFC FIRST BANK, Jyoti Resins, and Nykaa. Understanding the power of compound growth and the potential of CAGR can help navigate the complexities of the stock market.

Happy Investing!