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Windfall Gains from Infosys

How being a lazy investor in Infosys would have rewarded you i n spite of its recent downturn in its fortune

Time is the friend of the wonderful company, quipped Warren Buffett once. One of the finest examples you will find of such a business is Infosys. True, Infosys has had its good years and bad but let's take a look at what an ordinary investor would have made had he held on. If you had bought only a 100 shares of Infosys at its IPO in 1993, it would have cost you ₹9500. If you had forgotten about it or just never found the time to sell those shares, you would be in luck. Those shares today would be valued at a cool ₹6,10,79,466 to be exact after considering dividend reinvestment.

Of course not all companies are Infosys and not all companies with net you the same results. Time is also the enemy of the mediocre business, Buffett added. Many low-quality businesses will fall by the wayside unable to cope with the changing times. A major factor behind Infosys' success has been its promoters, led by Narayana Murthy who said on Infosys' 30th anniversary, "We have demonstrated that business can be run legally and ethically; that is possible for an Indian company to benchmark with global best; and that any set youngsters with values, hard work, team work and little bit of smartness can indeed be successful entrepreneur." This goes to prove, side with high-quality managements in high-quality businesses and you can expect to make your gains large over the long run. Happy long-term investing!

How 100 shares of IPO became 15,858

Financial YearDividend
per share (₹)
Dividend
amount (₹)
No. of shares after dividend reinvestment
FY-943.5700200
FY-954.5900200
FY-9651010202
FY-975.52244408
FY-9862460410
FY-997.56165822
FY-004.574161648
FY-0110164901649
FY-0220330601653
FY-0327448741662
FY-04129.58666146692
FY-0511.5789716867
FY-064562118013804
FY-0711.516113814012
FY-0833.2546855914092
FY-0923.533884714419
FY-102536687514675
FY-116088890014815
FY-124770918315089
FY-134264411215336
FY-146398021715559
FY-153047574015858