An investment of 1 lac in that IPO is worth Rs 8 crore today, which means the price has grown 800 times, making it an 800-bagger. Without dividends reinvested, the stock has delivered a return of 25% CAGR, whereas with dividends reinvested it is 30% CAGR. However, serious investing happens only when the investor has understood a company’ business model, risks to growth, market potential thoroughly and has invested at sane entry valuations, willing to wait for a business to grow its earnings in the future years.Ī great example of a multibagger is HDFC Bank, which has completed 26 years in 2021 since its IPO in 1995. The reward for an investor from a multibagger bet is by putting serious capital at work. The wealth creation could happen over a long horizon of time through compounding gradually and necessitates a patient investor’s mindset. We are referring to multibaggers as stocks which multiply or provide avenues for phenomenal wealth creation. At first, it may look like a risky undertaking in an overstimulated market environment. But the catch is- a multibagger is a multibagger only in hindsight. Investors looking to build capital with decent risk appetite aim to get their hands on multibaggers. Thus, multibaggers are stocks whose prices have risen multiple times their initial investment values. A stock that doubles its price is called two-bagger while if the price grows 10-times, it would be called a 10-bagger. These are essentially stocks that are undervalued and have strong fundamentals, thus presenting themselves as great investment options. These stocks were first invented by Peter Lynch, published in his book ‘One Up on Wall Street’. Multibagger stocks are equity shares of a company which generate returns multiple times higher than its associated cost of acquisition. Last Updated – July 2022 Best Mutlibagger Stocks In India Best Multibagger Stocks to Buy – Summary Table Sr.
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