Saturday 18 July 2015

HOW Rs. 10,000 BECAME Rs.500 CRORES+

Source: Quora

HOW Rs.10,000 BECAME Rs.500 CRORES

Mohammed Anwar Ahmed, 60, resides in the sleepy town of Amalner in district Jalgaon, Maharashtra. His father owned a large farmland in the 1970's. The father's untimely death in 1980 left the four sons to lead different paths in their lives. They sold the land and divided the proceeds of Rs.80,000 equally among themselves. Mohammed, the youngest of the four, then aged 27, was married for two years and had a year old son. On parting with his brothers, he was at crossroads and did not know the path he should choose for himself as all his working life he had worked on the fields. His one brother left Amalner while the two started their own shops.


In 1947, Chairman of WIPRO Ltd. and philanthropist Azim Premji's father Mohammad Hussain Hasham Premji set up the company's first plant here to manufacturer vegetable ghee, vanaspati and refined oils. It was then called Western India Vegetable Products Ltd. and had got listed on the stock exchange in 1946. Over the years many residents of Amalner worked at the plant and several residents were shareholders of the company. In 1966, Mr.Azim Premji became Chairman of the company.


As Mohammed Anwar Ahmed sat near a tea shop in Amalner, a young stock broker from Bombay (now Mumbai) named SatishShah stopped to ask a question. This meeting would change the life of Mohammed Anwar Ahmed. Satish Shah had come toAmalner to buy as many shares as he could on behalf of some clients in Bombay. The question that Satish Shah asked was : “Do you know anyone here who owns shares in that factory?” pointing to the WIPRO plant. Mohammed replied that the owners of the factory stays in Bombay. In short 15 minutes, Satish explained to Mohammed, how owning a share could make one a part owner in the company. This made Mohammed inquisitive and the meeting lasted for 30 more minutes. Mohammed helped Satish Shah go door to door to collect shares from willing sellers (in very small towns nearly everyone knows each other) and for himself bought 100 shares of Rs.100 face value, thus investing Rs.10,000 from the total of Rs.20,000 that he had. The rest, he invested in starting a trading business.


From then on Mohammed started to think himself as part owner of WIPRO (and rightly so) and vowed never to sell a single share till Mr. Azim Premji is at the helm. Here is how his initial investment of Rs.10,000 grew to over Rs.500 crores.

He had invested in 100 shares at face value of Rs.100 in 1980.

The initial investment was Rs.10,000.
In 1981, the company declared a 1:1 bonus. He now had 200 shares.
In 1985, the company declared 1:1 bonus. He therefore had 400 shares.
In 1986, the company split the share to Rs.10. He thus had 4000 shares.
In 1987, the company declared 1:1 bonus. He hence had 8000 shares.
In 1989, the company announced a 1:1 bonus. Now he had 16,000 shares.
In 1992, the company declared a 1:1 bonus. By now he had 32,000 shares.
In 1995, the company declared a 1:1 bonus. He then had 64,000 shares.
In 1997, the company declared 2:1 bonus. He now held 1,92,000 shares.
In 1999, the company split the share to Rs.2. He now had 9,60,000 shares.
In 2004, the company declared 2:1 bonus. He thus had 28,80,000 shares.
In 2005, the company declared 1:1 bonus. He came to have 57,60,000 shares.
In 2010, the company declared 2:3 bonus. He now had 96,00,000 shares.

The current market price is Rs.500 (2014) per share. The shares are valued at Rs.480 crores.
Over the past 33 years, the company regularly paid out dividends and increased them almost every year. Cumulatively he received Rs.118 crores as dividend over the past 33 years. Thus by investing Rs.10,000, Mohammed gained Rs.598 crores.

He is now retired and donates freely to charity from the dividends he receives. His foreign educated children often advice him to sell the shares but he has kept his vow of not selling a single share till Mr.Azim Premji is the working Chairman.

This is a lesson - both in patience and conviction.


  1. Sir What will be the relisting price of palred?
    when will it relist?

  2. It will be adjusted as per the last traded price.

  3. Seems the most extra ordinary story of wealth creation of not knowing the risks............hope something like that happens to me too

  4. Great story. There will be more retail investors participating in the near future.

  5. This comment has been removed by a blog administrator.

  6. Hi Sir what is your target price for skm egg products if held for 2 years.

    1. We should interpret the business, and estimate the future of it.

      The target price of the share depends on the business afterall.

  7. Sir could you please share your thoughts about farmex india.

  8. Its truely a inspiring story :-)

  9. Hello Sir, how did u see recent sell of stake by promoter's of Dynemic Products just before results?? Is something fishy there??

    1. Haha brother what is fishy? Sobhanaben Patel sold 9913 shares or 0.08% stake.

      The total amount she got after selling is something around 5 lacs, Do you think it is fishy? I think she wanted to go shopping.

  10. Sir ur view on orient paper
    Rs software

    1. Sir then please tel which is in your list...which you are following.Thanks

  11. Thanks Sir

    Could you please provide your inputs on SPIC. Is it good to take position in petrochemical sector ?

  12. Nice article pls advise ur views on MAN Industries and titagarh wagons ltd

  13. Hello Sir
    i bought adani ent... @ 102.....please share your view on this.....

  14. Phoenix lamp and meghmani org . . What your view? ? Can I buy??

  15. Sir can you please guide me about PNB share?
    I am having 200 shares @159
    Should I convert my investment in any other shares?