Bonus shares, stock split effect: BSE SME IPO turns ₹1.20 lakh to ₹13.45 lakh in 10 years
Bonus shares, stock split effect: As Rome was not built in a day, a stock market investor can't become rich overnight. It is often said that money is not in buying and selling stocks but in waiting. This rule applies to the primary market investors as well.
If an investor is convinced about a company's business prospects, then irrespective of size, one should stick with one's conviction and hold the stock as long as possible. An IPO investor is advised to keep the scrip as long as possible to create wealth on the premium that promoters of the company have offered to its investors in the primary market. So, by holding a stock for a long term, an allottee enjoys the benefit of both wealth creation.
By having a stock for the long term, they want the benefit of various other rewards like dividends, bonus shares, stock splits, buybacks of shares, etc., which helps an IPO allottee in wealth compounding.To truly grasp the potential for wealth creation through long-term investment, let's examine the journey of Captain Polyplast. The SME IPO, launched in November 2013 at a fixed price of ₹30 apiece, was listed on the BSE SME Exchange on 11th December 2013 at ₹33 apiece, delivering a 10 percent listing gain to the allottees. However, those who remained invested in the scrip despite the positive debut of the SME stock were rewarded with two bonus shares declared by the company board in 2014 and 2015.
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