This makes one wonder, how high have stock prices really reached?
While the majority of shares in India trade at a price below Rs1,000 apiece, there are a few stocks that trade at a price in multiples of thousands of rupees.
Here’s a list of 6 companies with the highest share price in the Indian market and a quick summary about them.
1. MRF – ( ₹80,860)
Madras Rubber Factory (MRF) is a leading tyre manufacturer in India.
The company is synonymous with vehicle tyres or Sachin Tendulkar’s cricket bat.
What’s fascinating about MRF is that it actually started off as a small toy manufacturing unit in the backyard shed of K.M. Mammen Mappillai in erstwhile Madras.
However, the tyre manufacturer also makes paints, sports goods, and the famous toy brand ‘Funskool’.
MRF has never split its share and the company’s shares yet have a face value of ₹10.
The stock of the company was trading at a price of ₹10,000 in November 2012 and hit an all-time high ₹98,575 in February 2021.
In the past one year, MRF share price has been up by 25.3%.
2. Honeywell Automation – ( ₹40,250)
Honeywell Automation, commands the second position in this list.
The company, a part of the Honeywell group, USA is a leader in providing integrated automation and software solutions.
It has a wide product portfolio in environmental & combustion controls, sensing & control, etc.
The company was set up in 1987 as a joint venture between the Tata Group and Honeywell’s parent company in the US and was earlier called Tata Honeywell. In 2004, this joint venture ended.
The stock touched its 52-week high price of ₹49,805 on 15 March 2021.
Market cap of the provider of integrated automation and software solution is ₹355.9 bn.
This stock has given a return of over 400%+ in the last 5 years.
3. Shree Cements – ( ₹29,781)
Shree Cement is the largest cement producer in India.
It was incorporated in the year 1979 and is listed on both exchanges. The company has grown internally and externally as well.
In the past few years, the stock price of Shree cement has increased tremendously.
Some of its brands include Shree Jung Rodhak, Bangur Cement, Rockstrong Cement.
The company’s current market cap stands at ₹1 tn.
In the past one year, the company’s share price has given a return of 26.5%.
4. Page Industries – ( ₹29,686)
Page Industries is a listed company in India that has the license to make, manufacture and distribute Jockey products in India, Bangladesh, UAE, Sri Lanka and Nepal.
Not only Jockey International, but Page Industries also has an exclusive license for Speedo International’s products.
This stock has turned out to be a multi-bagger stock in the last couple of years and has given a return of over 1,600%+ in the last ten years.
The market-cap of the stock is ₹331.6 bn. However, it trades at a P/E of 97.4 which is lower than the industry P/E of 195.5.
5. 3M India – ( ₹25,108)
3M India was set up in 1987 in India. Its business is extremely diversified across many categories.
A few brands from 3M that you might be familiar with include, Scotch Brite, Scotch Tapes, Post Its, Scotchgard glue among others.
These are the core brands that the brand houses apart from many other industries it covers, namely: adhesives, paint protection films, window films, signs, dental products, surgical solutions, etc.
The 3M India product range is the best example of what a diversified business is.
The company’s market-cap is ₹282.8 bn. Over the last 5 years, the company has given a return of 107%.
6. Nestle India – ( ₹17,500)
Nestle’s association with India dates back to the early 1900s when it had started sending products to the Indian market however it set up its first factory in India only in 1961.
It holds a unique position in the food segment of India.
Nestle, the brand, is home to many known names- Maggi range of noodles, sauce and masalas, Milo, Sunrise coffee, Narrow, a+ milk range, etc.
It owns some of the most popular chocolate brands: Munch, Barone, Milkybar, and KitKat.
This stock is currently trading at a P/E of 77.7 and has a market cap of ₹1.7 tn.
In the past one year, the company’s share price has gone up 5.8%.
Apart from the above top 6 stocks, here is a list of other highly priced stocks.
Trivia about high stock prices
Have you ever wondered how a stock attains prices like ₹50,000 per share and above?
If you look at the basics, the price of a single share comes from dividing the market capitalization of the firm by the number of outstanding shares a company has issued.
Let’s say, the number of outstanding shares issued by MRF are 4.24 m and the market cap of the company as on June 2020, was ₹265.7 bn.
If you divide the market cap by the number of shares outstanding, you will get the share price.
MRF share price = 265.7/ 0.00424 = ₹62,665
It’s all about how many shares a company issues.
The more shares a company issues over time, or if it splits is stock, it’s less likely that it will hit these high share price levels.
MRF has not done that and hence the price of a single stock is a lot. Why a company does this is completely their business strategy.
Also, just being highly priced doesn’t make them a good pick for investment either. Neither does it necessarily make them an untouchable from an investment perspective.
All this just proves how the stock price is not a good criterion for buying stocks.
Look into the company, its financials, management, business strategy, and all other fundamental factors before investing in it.
For more details about the specified companies, you can have a look at their factsheets and quarterly results on our website.
(This article is syndicated from Equitymaster.com)
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