Note: This article was originally published in 2012 and has been updated with the latest numbers as of 2021.
Do you want to hear the updated story of the Rs 10,000 invested in Wipro in 1980? A story that has been told and retold countless times as the Wipro multibagger story?
So here it is…
Wouldn’t you be shocked if we told you that some long-term investor has turned Rs 10,000 into Rs 1300+ Crores in 40 years?
And that too by doing nothing in stock markets! and just holding his original investments?
I am sure your next question would definitely be – Who the f*** has done it?
My answer is that I don’t know.
But I am pretty sure that promoters of the company would be one of them.
They would have held shares for 40+ years and made a killing.
By the way, turning Rs 10,000 to Rs 1300+ Cr is the same as growing your money 42% year on year for 40+ years.
Even the great Warren Buffett managed a ‘paltry’ 25%. So even if we told you earlier that you cannot become Warren Buffett, here we have data, which suggests that you actually can!!
(In comparison, banks pay 5-6% per year on fixed deposits)
So now you’ll ask – How has it been done?
Before we answer this question, we would caution you that the data given below have been collected from various sources and may or may not be correct. So, take it with a pinch of salt.
The company is WIPRO.
And we start in the 1980s.
What was the share price of Wipro in 1980?
Rs 100 was the Wipro share price in the year 1980.
Suppose you invested Rs 10,000 in Wipro shares in 1980. You would have got 100 shares @ Rs 100 each.
Do note that Rs 10,000 in 1980 was a huge amount. It wouldn’t have been possible for most Indians to invest even Rs 1000 then, leave alone Rs 10,000.
Now over the years, the shares of Wipro have gone through multiple splits & bonuses.
So we adjust them as and when splits & bonuses happened:
- 1980 – Bought 100 shares @ Rs 100 with initial Rs 10,000 investment
- 1981 – 1:1 Bonus = 200 shares
- 1985 – 1:1 Bonus = 400 shares
- 1986 – Stock Split to Rs.10 face value = 4000 shares
- 1987 – 1:1 Bonus = 8000 shares
- 1989 – 1:1 Bonus = 16,000 shares
- 1992 – 1:1 Bonus = 32,000 shares
- 1995 – 1:1 Bonus = 64,000 shares
- 1997 – 2:1 Bonus = 1,92,000 shares
- 1999 – Stock Split to Rs. 2 face value = 9,60,000 shares
- 2004 – 2:1 Bonus = 28,80,000 shares
- 2005 – 1:1 Bonus = 57,60,000 shares
- 2010 – 2:3 Bonus = 96,00,000 shares
- 2017 – 1:1 Bonus = 1,92,00,000 shares
- 2019 – 1:3 Bonus = 2,56,00,000 shares
The value of one share of Wipro is around Rs 540 (in Jul-2021).
So the effective price of Wipro’s shares held today (2.56 crore shares) as the Wipro share price in 1980 to 2021 changed and the stock split and issued bonus would be close to nil. Or to be more specific Rs 0.0004 per share!
But leave the cost per share aside,
What is the current value of the 2.56 crore shares of Wipro?
Hold your breath!
Rs 1382 crore!
As of today, your investment of Rs 10,000 (yes, just Rs 10,000) is worth a staggering Rs 1382 crores!!
That is the Wipro share returns in the last 40 years!
A gravity-defying CAGR of 42%. I am sure no one would have made that kind of money in Bitcoin as well as even today.
And we are not finished yet. If you know about the benefit of dividend investing and one day, want to live off dividends in India, then you would realize that Wipro has been a regular dividend payer as well (though not a great one in terms of dividend yield or dividend payout ratio).
For the year ending March 2021, Wipro has declared an equity dividend of 50.00% amounting to Rs 1 per share. At the current share price of Rs 540 per share, this results in a dividend yield of about 0.2%.
So your holding of 2.56 crore shares would have earned you Rs 2.56 crore in annual dividend income alone.
Just imagine how much you could have made from dividends alone in the last 40 years!
God only knows which stocks in India can repeat the multibagger story of Wipro in years to come. More importantly, one would need a tremendous amount of patience to stick around and get such returns over time periods of not years but decades. And for that, you really do need to have ‘promoter-owner’ like mentality. And that is easier said than done.
So that is the story of Rs 10,000 invested in Wipro in 1980.
I am sure somewhere there is a hidden Wipro shareholder story like this one.