The Roots of Wipro in Amalner: Nestled 350 kilometers from the bustling city of Mumbai, on the banks of the Bori River in Jalgaon district, lies the small city of Amalner. In 1946, a company named Western Indian Vegetables Product Limited, now known as Wipro Ltd, was listed on the Stock Exchange. The company set up its first plant in Amalner in 1947 to produce soap, vanaspati, ghee, and edible oil, under the leadership of Mr. Mohammad Hussain Premji. Many Amalner residents worked at the plant and eventually became shareholders. In 1966, the esteemed Mr. Azim Premji took over as Chairman, steering the company toward remarkable growth.
The Unwavering Faith of Early Investors
In the late 1970s, a rights offer was made but not fully subscribed, with the face value of the stock at Rs. 100. Some investors bought just a single share due to the significant value of Rs. 100 at the time. Despite the share price dropping to Rs. 35 without buyers at one point, a few steadfast investors held onto their shares, placing their faith in the management’s capabilities.
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The Turning Point: Ahmed’s Investment in Wipro
One such investor was Mohammed Anwar Ahmed, a resident of Amalner. In the 1970s, Ahmed inherited Rs. 20,000 after his father’s demise. In 1980, a chance meeting with a young stockbroker from Mumbai at a local tea shop changed Ahmed’s life forever. The broker, who was in Amalner to buy shares for clients, explained to Ahmed the concept of owning shares and how it could make one a part-owner of the company. Intrigued and convinced, Ahmed used Rs. 10,000 to buy 100 shares with a face value of Rs. 100 each.
Ahmed’s Wealth Growth Journey: A Detailed Breakdown
Timeline of Ahmed’s Investment Growth of Wipro
| Year | Event | Shares Held |
|---|---|---|
| 1981 | 1:1 Bonus | 200 |
| 1985 | 1:1 Bonus | 400 |
| 1986 | Stock Split to Rs. 10 | 4,000 |
| 1987 | 1:1 Bonus | 8,000 |
| 1989 | 1:1 Bonus | 16,000 |
| 1992 | 1:1 Bonus | 32,000 |
| 1995 | 1:1 Bonus | 64,000 |
| 1997 | 2:1 Bonus | 1,92,000 |
| 1999 | Stock Split to Rs. 2 | 9,60,000 |
| 2004 | 2:1 Bonus | 28,80,000 |
| 2005 | 1:1 Bonus | 57,60,000 |
| 2010 | 2:3 Bonus | 96,00,000 |
As of the current date, with Wipro’s share price around Rs. 540, Ahmed’s shares are worth an astonishing Rs. 518 crore. Additionally, he has earned over Rs. 100 crore in dividends over the years.
Key Takeaways for Aspiring Investors
1. Invest in Visionary Companies
Identifying and investing in companies with visionary leaders can yield significant long-term returns.
2. Hold Through Thick and Thin
Holding onto shares as long as the company’s fundamentals remain strong can be highly rewarding.
3. Ride Out Short-Term Fluctuations
Short-term market movements are less important if the company’s story is intact.
4. Value of Dividends
Dividends play a crucial role in wealth accumulation over extended periods.
5. Bonuses Boost Wealth
Bonus shares can significantly increase your holdings and contribute to long-term wealth creation.
FAQs
1. How did Ahmed’s investment in Wipro grow so significantly?
Ahmed’s investment grew due to a combination of stock bonuses and splits, coupled with the substantial appreciation in Wipro’s stock price over 36 years.
2. Why is it important to hold shares for the long term?
Holding shares for the long term allows investors to benefit from compound growth, company bonuses, and dividends, leading to significant wealth accumulation if the company performs well.
3. What lessons can new investors learn from Ahmed’s story?
New investors should focus on investing in fundamentally strong companies with visionary leadership, remain patient through market fluctuations, and reinvest dividends to maximize returns over time.
Conclusion: The Power of Long-Term Investment
Ahmed’s journey from a small-town investor to a multi-crore shareholder highlights the immense potential of long-term investing in well-managed companies. It underscores the importance of patience, vision, and trust in a company’s leadership. For aspiring investors, Ahmed’s story is a testament to the transformative power of thoughtful and persistent investing.
By following these principles, investors can potentially achieve similar success, turning modest investments into substantial wealth over time.
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