Do you know what was the price of Bajaj Finance stock in 2009 at the bottom of the Global Financial Crisis? Read on.
The astonishing journey of Bajaj Finance
Look at some data related to Bajaj Finance
Total Assets: Rs 12,000 crore
Net Profit: Rs 400 crore
Market Cap: Rs 3,000 crore
Total Assets: Rs 212,000 crore
Net Profit: Rs 7000 crore
Market Cap: Rs 440,000 crore
A near 20x jump in profits, and similar jump in assets. But once the market believed the story, the market capitalization has gone up by more than 130 times!
In Financial services, the bigger the entity, the lesser the risk perception of the market, and higher the valuation the company gets. A track record of managing risk while executing can do wonders for stock prices.
A CAGR of 63% in the stock returns over the past 10 years! Bajaj Finance is now one of the top 10 stocks in India by market capitalization, and has the highest CAGR across the top 10 stocks over the past 10 years.
The stock was available at Rs 100 in 2012, and at Rs 7 in 2009 (adjusted for split and bonus). It is up 1000x from the lows of the Financial Crisis in 2008/09
Do you know anyone who invested then, and has help onto this story till today?
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Till next week. Do write to us if you have any suggestions on what we should write about in the newsletter.