Maruti Share Price History
The IPO price was set at ₹ 125 per share. The IPO was over-subscribed 13 times. Those who were lucky to get an allotment were rewarded on the first day itself.
On July 9th, 2003, Maruti was first listed on the stock exchanges in India. The share opened at ₹ 165, hit a high of ₹ 170, fell to ₹ 155, and finally ended its day at ₹ 164 per share. A listing gain of 31%.
Great interest in the IPO and fantastic listing. But it did not stop there.
By the end of the year 2003, within 6 months of its listing – the share price of Maruti rose to ₹ 375 per share. Even those who missed the IPO and bought at ₹ 165 after listing – were rewarded with 127% absolute returns in just 6 months.
Since then, the journey hasn’t been smooth, but Maruti has rewarded its shareholders with consistent dividends and excellent returns from growth in the value of the share – this has been possible due to Maruti’s domination of the automobile sector and steady growth in car sales across the country.
Those are the year-end prices of the Maruti share. The chart looks great, doesn’t it?
A ₹ 125 share is now valued at nearly ₹ 7000. Sounds fantastic, but in reality, it was far from easy.
Picking quality stocks is easy, even giving the right allocation isn’t difficult. But staying invested in a company for a long period of time is probably the most difficult part of investing.
Observe the chart (or table) above carefully and think from the point-of-view of an investor, who invested in the company in 2003 or 2004.
Sure, the stock price went up. But to enjoy the massive gains the company has given between 2011 – and 2017, an investor had to see through two periods of massive downfall.
From the end of 2007 to the end of 2008, Maruti crashed by nearly 50%. Nearly all the gains made between 2004 to 2007 were lost in a single year – the great market crash of 2008.
Those who survived 2008 were rewarded in 2009 with 200% gains – but were tested once again in 2010 and 2011 which were extremely painful as the stock crashed by 45% during that period.
If you lost hope in 2011 and sold the shares of Maruti, you would’ve lost all the gains for 6 consecutive years between 2012 – and 2017.
Maruti is testing its long-term investors yet again – as the stock hasn’t performed since 2018. From a high of ₹ 10,000 per share on December 20, 2017, the Maruti share price crashed to ₹ 4001 on April 3rd, 2020.
On that one day in April 2020, all the gains in stock price between 2015 – and 2020 were lost.
Who said long-term investing is easy? It’s painful. It’s difficult. And because it is difficult, it can be extremely rewarding too. There is no gain, without lots of pain in the stock market.
Even though the stock has recovered from its Covid-lows, Maruti is still 30% down from its 2017 highs.
Car sales are down, the economy is struggling due to Coronavirus. People are losing jobs.
During such times, when there is negativity all around. Very few people would be interested in buying Maruti shares. No one knows how many years the share could underperform.
There is also a lot of uncertainty around electric cars and whether Maruti can make the transition. Companies that have been slow to transition have been wiped out – Nokia and Kodak are examples of this.
If the company does well. If the economy grows and Indians go out to buy cars in big numbers once again – Maruti could become a ‘multi-bagger’ even from here.
Here is a stat that could get you interested.
India has a long way to go. Even if 50 out of 1000 people own cars in India – most of those cars could well be a Maruti.
After all, India trusts the brand, its after-sale service, and also its service centers and dealers are spread across the length and breadth of the country.
At the same time – there could be a shift with people preferring renting an Ola or Uber, instead of buying a car. There could be a competitor who takes away market share (Hyundai for example).
These are the challenges that every long-term investor faces. The future is always uncertain, this makes returns from the stock market uncertain too.
Maruti Share Returns: Compounded and Absolute
How many returns has Maruti Suzuki given if you bought the share 2 years ago? Or 3, 4, or 5 years ago.
What if you were holding Maruti shares from the time of its IPO? What if you bought on a listing day at ₹ 165 per share and managed to hold it through its ups and downs.
Check out the table below.
Maruti has compounded at an excellent rate of 26.66% if you were holding the shares from IPO. It has given nearly 25% returns if you bought it on the day it was listed on the stock exchange.
The last 3 years have been poor, but the 10 and 15-year returns are still excellent. And it does not include dividends that the company has been giving to its shareholders.
Suppose you invested 1 lakh rupees in Maruti, how much would it be over different time periods?
The answer is in the table below:
What if you opened a fixed deposit of 1 lakh and made another investment of 1 lakh in Maruti Suzuki Limited.
The results are below. Again, the returns from Maruti does not include dividends.
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