Investors have to raise long-term stocks from the rise in the share price of their portfolio stock—another means of income for shareholders which helps to grow stock, not in ascending. Long-term stock investors named dividends, bonus shares, buyback of shares etc., to grow. However, if the stock grows along these means, it becomes icing on the cake for stock investors.
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The shares of Titan company have given higher return to its shareholders and has announced bonus shares to split stocks. In the Indian stock market, the company’s shares are one of the multi-bagger stocks delivered in the last few years. The company’s price increased from Rs 3 to Rs 2,535 per level; in the last 20 years, it was around 845. Also, the company has announced a 10:1 stock split and 1:1 bonus share in this period.
In June 2011, Tata group company announced 1:1 bonus shares for its shareholders. So, due to the bonus shares issuance, the cost price of shareholders who bought Titan shares 20 years ago further went down by 50 per cent. Already, the stock split had put down their input cost at 10 per cent of the actual cost. Bonus share issue further put down their cost price to 5 per cent of their actual buying level.
Hence, Titan Company shares have to pay Rs 3 per share; their buying cost came down to Rs 0.15 per share due to the 10:1 stock split and 1:1 bonus shares announced in June 2011. For such long-term investors, Titan’s share price has ascended from Rs 0.15 to Rs 2,535 apiece levels, logging 16,900 times in the last two decades.
