Journey Of India’s Costliest Share: The MRF Saga
A stock that is a wealth creator for some and a destroyer for others. A stock that traded at ₹11 in 1993 had touched ₹98,599.95 a piece in February ‘21.
Yes, we’re talking about MRF!
🎢 A Rollercoaster Ride
The stock has seen multiple crashes such as the Harshad Mehta Scam in 1992, the Dot-Com bubble, the financial crisis of 2008, the current Coronavirus-led market crash etc.
But if you were too young to start investing in the 90s, here is the growth timeline of stock prices since 2000:
⌛ In January 2000 the stock traded at ₹2500 before the Dot-com bubble burst
⌛ When markets crashed in 2000-01, MRF tanked by 83% to ₹401 in October 2001.
⌛ The stock bounced back and reached ₹3000 in March 2005. Had one sold the stock at a loss during the crash, they certainly would have regretted their decision.
Check the image attached for further timeline details.
The hallmark of successful long-term investors is the ability to ride the ups and downs. The market will test your conviction in a company countless times—this is true for any stock you pick. It doesn’t matter if it’s Reliance or the world’s most valued company, Amazon.
The 74-year-old company crashed from ₹3500 levels to ₹500 between 1996- 2001. The stock also crashed from ₹8000 in 2007–08 to nearly ₹1500.
Unfortunately for those who bought MRF at its peak, it was a wealth destroyer when it fell by 90%, while those who bought it after the crash have created immense wealth.
Someone who invested in MRF in the 1990s would have had to painfully witness their wealth erode by 70-80% multiple times. But, had they stayed invested, they would be set for life today. 💸