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In five years, NSE SME stock turns from 1.1 lakh to 8.17 lakh

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One of the equities whose long-term investors have benefited from the stock price increase after its listing on the NSE SME platform in 2017 is Tirupati Forge shares. In October 2017, the SME stock was launched on the NSE SME exchange. The SME stock had a respectable debut at 34.80 versus its issue price of 29, giving its lucky allottees a 20% listing premium. The SME stock didn’t stop there, either. The SME business afterward announced bonus shares and a stock split, which were advantageous to its prior long-term investors.

One lot of the Tirupati Forge IPO, including 4,000 shares of the firm each lot, cost Rs. 1.16 lakh at the time of application. Therefore, the minimum investment required to participate in this SME IPO was Rs. 1.16 lakh, and 4,000 Tirupati Forge shares were allotted in total to the Demat account upon the completion of share allocation.

Bonus Share, Stock Split Announcement

The SME-sized small-cap business announced a stock split in a 1:5 ratio in October 2021 while announcing bonus shares in a 3:4 ratio in the same month, following a successful launch on the NSE SME exchange. Therefore, if an allottee had stayed invested in this SME stock after it was successfully listed at a 20% premium, the company’s shares would have multiplied many times over.

Impact on Shareholding of an IPO Allottee

An allottee’s 4,000 shares would have increased to 20,000 following a 1:5 stock split (4,000 x 5). The small-cap business promised three bonus shares for every four shares that investors held, increasing this 20,000 shares to 35,000.

Impact on Investment

As previously indicated, applicants had to submit bids for the Tirupati Forge IPO in lots, and each lot needed 4,000 shares and a minimum of 1.16 lakh (29 x 4,000). Without any further investment, an allottee’s stake in the firm would have increased to 35,000 after the stock split and the issuing of bonus shares. The current share price of Tirupati Forge is 23.35, hence the absolute worth of an allottee’s money would have increased to 8,17,250 or 8.17 lakh today. This indicates that if an allottee had continued to invest in this stock over this time, their original 1.16 lakh rupees would now be 8.17 lakh.

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