The Historical and Current Value of Reliance Industries Shares: An Analysis
In this article, we will delve into the value of Reliance Industries shares purchased in 1994 and compare it with the value of a similar investment made in 1977. We aim to provide a comprehensive understanding of how stock performance and stock splits can significantly impact an investment's value over time.
1994 Investment in Reliance Industries
The price of Reliance Industries shares in early 1994 was approximately 50 per share. Given this price, investors who purchased 100 shares would have initiated their investment at a cost of Rs. 5,000.
Reliance Industries has undergone several significant stock splits and bonus issues since 1994. These changes have multiplied the number of shares an investor holds, potentially increasing the investment's value. Below, we outline the impact of these modifications:
Stock Splits and Bonuses
2001 Bonus Issue (1:1): The shares doubled from 100 to 200. 2006 Bonus Issue (1:1): The shares again doubled from 200 to 400. 2017 Bonus Issue (1:1): The shares doubled once more from 400 to 800.Considering these splits and bonuses, the initial 100 shares purchased in 1994 would have grown to 800 shares. At the current market price, each share of Reliance Industries is valued at approximately Rs. 2,500.
The total value of the holding as of August 2023 can be calculated as follows:
Total Shares: 100 shares → 800 shares after all bonuses
Current Value: 800 shares × 2500 Rs. 2,000,000
1977 Investment in Reliance Industries
For context, let’s also analyze a similar investment made in 1977. In November 1977, Reliance Industries issued 2.8 million equity shares of Rs. 10 each. A Rs. 1000 investment in 1977 would have bought 100 shares.
According to the article referenced, by June 2012, the stock price had reached Rs. 700 per share. An investment of Rs. 10,000 in 1977 would thus have grown to Rs. 7,780,000 in 2012. Given that the investment was Rs. 10,000, the value would have been ten times the 7,780,000, leading to a value of Rs. 77,800,000.
However, as of the current price level of Rs. 1400, the investment value is twice that of the 2012 level. Therefore, the total net worth of the shares as of today would be:
77,800,000 × 2 Rs. 155,600,000 (15560000 rupees).
Such an investment would represent a substantial increase from the initial Rs. 10,000 investment made in 1977.
Conclusion
The considerable value appreciation of investment in Reliance Industries demonstrates the impact of stock splits and bonus issues on long-term investment potential. In conclusion, a Rs. 10,000 investment in 1994 could be worth around Rs. 2,000,000 as of August 2023, while a similar investment in 1977 could achieve a net worth of Rs. 15560000 today.