1. The Founding & IPO: Small Beginnings, Big Vision
Back in 1981, a group of seven engineers led by N.R. Narayana Murthy founded Infosys with seed capital of just USD 250. The vision was ambitious — tap into the global demand for software services. Fast forward to February 1993, Infosys launched its IPO at ₹95 per share (face value ₹10). The response from retail investors was lukewarm; many saw IT as risky, untested in India at scale. Trading officially began on the stock exchanges (Dalal Street) on 14 June 1993.
This small IPO price, though, concealed something huge: the potential for compounding with bonus issues, dividends, and consistent growth. Those who believed in the company’s fundamentals and held on would see returns that many can only dream of.
2. Bonus Shares, Splits & Loyalty: Multiplying Your Share Count
One of the key parts of the Infosys compounding story is bonus shares and stock splits. Over its history:
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Infosys issued multiple 1:1 bonus share issues in years like 1994, 1997, 1999, and again in later years such as 2014, 2015, and 2018.
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It also split its shares (for example, in 1999/2000); adjustments on face value and number of shares mean that the original shareholding has been multiplied many times.
Because of these actions, someone who bought 100 shares at IPO didn’t just end up with 100 shares — their share count multiplied dramatically. These corporate actions are what turn a modest initial investment into a large base that benefits strongly from subsequent growth.
3. Long‑Term Share Price Growth: From ₹95 to the Multicrore Returns
After the IPO price of ₹95 (1993), Infosys’ share price, adjusted for bonuses and splits, rose over the years. By 2018, media reports noted that ₹10,000 invested in the IPO had grown to over ₹4 crore.
To get more recent: articles have shown that if someone had invested ₹1,00,000 in Infosys twenty years earlier (roughly 2003), today’s value would be in the ballpark of ₹2.75 crore, taking into account bonus shares, splits, and dividends.
Another source states that ₹1 lakh invested in early 2000 would have grown to nearly ₹9.58 crore by recent times, mainly due to multiple bonus events and the spectacular share price rise.
4. A Hypothetical Case: If You Had Invested ₹10,000 in 1993
Let’s walk through a concrete example to make this even clearer. Assume an investor bought ₹10,000 worth of Infosys at the IPO in 1993 (i.e. about 105 shares approx, since IPO price was ₹95). Over time:
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You receive multiple bonus issues (1:1 etc.), which double your shares each time for each 1:1 bonus.
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With splits and bonus events, your share count might multiply many times (e.g. from 100 shares to several thousand).
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The share price (adjusted) and the equity value keep rising with revenue, profit growth, IT sector growth, exports, global clients, etc.
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Add regular dividends the company paid over the years.
By 2018, this ₹10,000 became more than ₹4 crore. By more recent years, depending on exact holding and whether all dividends were reinvested, likely even more.
This gives a CAGR (compound annual growth rate) in the range of ~25‑30% or more over long periods (20‑30 years), depending on exact assumptions.
5. Stability + Growth + Payouts: Why It Worked
Several key factors allowed this exponential growth:
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Consistent Financial Performance: Infosys kept growing its revenues, expanding globally, adding clients, margins improving. Not just hype, but real earnings.
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Payouts to Shareholders: Regular dividends + buybacks + bonus shares ensured that shareholders benefited not just from price appreciation but also from cash flows.
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Strong Governance & Brand: The company’s reputation, leadership, ability to weather crises (global recessions, currency risks, competition) reinforced investor confidence.
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IT Sector Tailwinds: The boom in outsourcing, global software demand, India’s cost advantage, English‑speaking workforce, improving infrastructure, regulatory reforms — all served as favorable headwinds.
6. Risks & Missed Opportunities: But Not All Roses
Of course, the journey wasn’t without bumps:
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There were years with underperformance or correction; for example, macroeconomic risks, tech bubbles bursting, currency depreciation, rising costs. Holding long term required patience.
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Investors who exited early missed much of the upside. The power of compounding works only if distributions and growth are maintained and shares are held.
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Opportunity cost: Some investors might have reallocated gains, sold too early, or failed to reinvest dividends. Even failing to adjust for bonus issues can lead to under‑estimating holding value.
7. What the ₹10 Crore Club Means Today
When we speak of the “₹10 Crore Club” of early investors, it refers to those who:
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Bought Infosys shares in early days (IPO or near IPO),
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Held on through all bonus/split events,
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Reinvested or benefited from dividends,
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Didn’t panic out in downturns.
For them, a relatively modest investment (say ₹1‑2 lakh at the time, or even smaller) has by now become values in crores. It’s a real example of what long‑term investing + compounding + patience can do, especially in growth sectors.
8. Current Snapshot & What It Implies for New Investors
As of the latest:
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Infosys continues to be among the leading IT services firms in India, with large global clients, growing digital‑transformation businesses, and consistent profitability.
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In the recent 5 fiscal years, Infosys has also returned over ₹1.1 lakh crore to shareholders through dividends and buybacks.
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Shareholding structure, corporate governance, technological upgrades, and future themes (AI, cloud, edge computing) remain important tailwinds.
So, for newer investors: while you missed the IPO era, understanding how compounding works through bonus issues, reinvested dividends, and riding the long‑term growth can still help you identify similar opportunities.
9. Lessons for Every Investor
From the Infosys story, these important lessons emerge:
# Start Early If Possible: Time in the market matters more than timing the market.# Don’t Ignore Small Initial Investments: Even small amounts, if held long, can multiply enormously.
# Bonuses & Splits Are Powerful: Always adjust your ownership count and cost base when companies issue bonuses or split their shares.
# Patience & Discipline: Staying through highs and lows matters.
# Check Fundamentals + Leadership + Governance: Growth without strong governance carries risk.
10. Conclusion: The Power of Compound Thinking
Infosys didn’t just become a tech giant — it became a living lesson in the power of compounding. For early investors who believed, held, and stayed loyal, the rewards are nothing short of transformational.
Even today, the story is relevant: whether in IT, consumer, manufacturing, or any emerging sector — companies that grow profits, reward shareholders, and maintain good governance can create wealth for decades.
If you’re starting now: focus on quality, reinvest dividends, understand corporate actions, and most importantly, give time time.
