Equity Rewards The Brave – Safety Has Its Cost

If someone had told you in 2003 that a ₹10,000 investment in a watch company would become ₹18.2 crore, you’d probably laugh. But that’s exactly what long term equity investing can do. This is the story of Titan, a Tata Group Company.

There are so many multi bagger stocks like Infosys, Wipro, Eicher Motors, Asian Paints, Bajaj Finance , Reliance that awarded the shareholders 1000 times and above on capital appreciation besides regular dividends.

Before I explain exactly how it happened, I would like to share why I chose to write about equity. A few weeks back, I met one of my friends who had been working with SBI for a long time. So, he was into the money market, but never looked into the capital market. He never believed in investing in shares. So, once, over a cup of tea , I mentioned the wealth created by his company for the shareholders. How the investment grew over time after the bonus and 1:10 stock-split. After hearing this, he said that he had SBI shares that he got through ESOP ( Employees Stock Option) but sold within a few months at loss. It generally happens with everyone. We don’t stay invested for a long period. The same is true for me.

Let me share my view on Investment in stocks. Most of us grow up with the idea that “ playing it safe” with our money is the smart thing to do. We keep our money in FD, RD, or may be in gold – anything that feels secure. But, here’s something to think about : not taking any risk can actually be the biggest risk of all.

Now, out of say ₹100, how much should you invest in FD or Debt and how much in Equity depend on your comfort level or risk profile.

A risk profile is basically your ability and willingness to take financial risks. It depends on things like :

Your age

Your income

Your financial goals

Your responsibilities

Your liabilities

Your networth

Your comfort with market volatility

Conservative investors may prefer more debt or fixed – income products.

Moderate investors may mix equity and debt, say 60:40.

Aggressive investors may go heavy on equities, even 80:20 or more.

Titan Story

Suppose, you invested ₹10,000 on buying Titan shares in 2003 at an average buying price of ₹4.

So, you get 2500 shares.

The company declared a bonus in the 1:1 ratio in 2011.

Your 2500 shares become 5000 now.

There was another action of stock split at 1:10 ratio i.e. the face value of ₹10 becomes ₹1.

This means your 5000 shares become 50,000 now.

The current value of each share is ₹3616 ( the closing price as on 16th October 2025).

So, the total investment value today:

50,000× ₹3616

= ₹18.2 crores

This is 18180 times capital appreciation ( without even counting dividends).

MRF is one unique case. It got listed way back in 1961, has issued only one bonus share ever – in 1970. With no splits or further bonuses its book value per Share kept rising year after year. The result – a staggering market price of ₹1,55,895 per share of ₹10 face value. Those who bought 100 shares at the face value i.e., a total ₹1000 investment at the beginning of the company’s journey, and now if they sell it today , the amount would be ₹1.56 crore!

The market closed a few minutes back as I’m writing this blog for you and I just checked the closing price mentioned above.

Now, let’s talk about equity – in simple words, owning a part of a company. When you buy shares of a company, you become a part – owner. If the company grows, you grow with it. And this is where real wealth is created.

In my future blogs I will take you through the financial analysis of companies and how it impacts your share price. Remember, the main objective of the board of directors is to maximize the shareholders’ wealth.

Equity has been a phenomenal wealth creator – examples like Titan, MRF, ITC, Infosys, SBI & SRF prove the power of compounding.

However, the stock market is not a one- way street. Several once-celebrated names like Kingfisher Airlines, Videocon, and Unitech have completely vanished from the exchanges.

History shows both – wealth creation and wealth erosion –run side by side.

However, a base of 100 in 1979, the Sensex, now stands above 83,000 reflecting India’s long term growth story.

Yet, the journey also teaches us – in equity, wisdom matters as much as optimism. So, a key lesson for investors– Buy Quality, Stay Invested. Ignore Noise, Focus on Business ( Titan had ups and downs, but the underlying business stayed strong). Let Time Do the Work. 20 years may seem long, but the rewards were life- changing.

Please remember : You don’t need to time the market. You need time in the market.

Final Thoughts: Equity is not gambling. It’s ownership. It believes in India’s growth, and the growth of companies that shape our everyday life. Yes, there will be ups and downs, but over the long term, equities have always rewarded patience and discipline.

So, don’t just save, multiply.

Signing off for today – stay curious, stay invested, and let equity do the magic.

Disclaimer: The information provided in the blog is for educational and informational purposes only and should not be construed as financial advice. Readers are encouraged to consult a qualified financial advisor before making any financial decisions. All views expressed are personal.