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In June 1993, something really special happened in the world of investing. Infosys, a company in India, decided to sell its shares to the public for the first time. This process is called an Initial Public Offering or IPO. Each share of Infosys was sold at a price of Rs 95.
But here’s the interesting part: not many people were interested in buying these shares. This is what we call an “under subscription.” In simple words, it means that not enough people wanted to buy Infosys shares at that time.
Morgan Stanley, a big financial company, came to the rescue. They decided to buy 13% of Infosys shares. This was a smart move because, as it turns out, Infosys was about to become a big success.
When Infosys’s shares were first made available to the public, their price was Rs 145. This means that if you had bought one share at Rs 95 during the IPO and sold it when it became public, you would have made a profit of almost 52%. In other words, the shares were now worth more than what people paid for them.
The people who invested in Infosys during the IPO, buying shares at Rs 95, now have a very valuable investment. If they had invested Rs 9,500 in Infosys back then, it would be worth almost Rs 2 crore today. That’s a huge increase in the value of their investment.
But there’s more good news. Infosys also paid dividends to its shareholders. Think of dividends as extra money that a company gives to its shareholders as a way of sharing its profits. In this case, those who invested in Infosys during the IPO also received dividends of approximately Rs 20 lakh.
This story teaches us an important lesson about investing. It shows that good investments are not just about following what everyone else is doing. Instead, it’s about doing your own research and making careful decisions. In the case of Infosys, those who believed in the company and invested in it during the IPO, even when others weren’t interested, ended up with a very valuable investment. So, sometimes, it pays off to go against the crowd and trust your own judgment when it comes to investing.
