The Indian equity market has witnessed a significant decrease in the number of companies with a valuation of $1 billion or more, with nearly one-fifth of the count diminishing over the past five months. At the peak on September 26 last year, 618 companies were part of the billion-dollar club. However, this number has now dropped to 500 following a $1 lakh crore loss in India's market capitalisation, largely due to the consistent selling by foreign portfolio investors (FPIs).
Amid discussions on social media regarding the equity market correction, SIP investment, and bear markets, experts and financial planners have been advising investors to remain patient and continue investing in stocks even during the bear market.
Abhijit Chokshi, Founder of Stockifi.in, highlighted in a recent post the remarkable growth of Maruti Suzuki India Limited as a multibagger. After debuting at Rs 125 per share, the stock has surged to Rs 13,000 per share.
In 2003, the government sold a 25 per cent stake in Maruti Suzuki Limited (then known as Maruti Udyog Limited) at Rs 125 per share. The stock first traded on July 09, 2003 and closed the day at Rs 164, representing a 32 per cent increase from its issue price.
Over the span of 20 years, Maruti's stock has outperformed Honda, Toyota, and Nissan combined.
Chokshi wrote on X: "If you had invested Rs 1 lakh in Maruti's IPO (800 shares at Rs 125), your investment would have grown to Rs 1 crore by 2017 at Rs 10,000 per share—a 100x return. Taking into account inflation and dividends (e.g., Rs 125/share in 2024), the actual returns still show an impressive growth. Despite the stock's listing price of Rs 165, it yielded over 75x returns by 2024, solidifying its status as a top-performing investment."
Describing Maruti's joureny in Indian stock market, Chokshi noted:
1. Maruti’s story
Maruti’s story begins in 1981 when it was incorporated as Maruti Udyog Limited, a government-led initiative to create an affordable "people’s car" for India’s middle class.
At the time, India’s automobile market was dominated by outdated models from Hindustan Motors and Premier Automobiles.
2. Maruti’s rise
The government, under Indira Gandhi, partnered with Suzuki Motor Corporation of Japan, which took a modest 26% stake in 1982.
This collaboration brought modern technology and efficiency to a stagnant industry, setting the stage for Maruti’s rise.
3. The Game-Changer: Maruti 800
In December 1983, Maruti launched the Maruti 800, a small, fuel-efficient car based on the Suzuki Alto.
Priced at around Rs 47,500, it was affordable for India’s emerging middle class.
The car became an instant hit, receiving 120,000 bookings in its first year—far exceeding Suzuki’s expectations.
4. With a production capacity starting at 20,000 units annually, Maruti quickly scaled up to meet demand.
The Maruti 800 redefined personal mobility in India, becoming a symbol of aspiration and reliability.
5. Maruti's IPO
The IPO Milestone: Listing in 2003
Fast forward to 2003—Maruti had already established itself as India’s leading carmaker.
The Government of India decided to divest 25% of its stake in Maruti Udyog Limited through an Initial Public Offering (IPO).
Priced at Rs 125 per share, the IPO was oversubscribed 13 times.
6. Listing on BSE and NSE
On July 9, 2003, Maruti listed on the BSE and NSE, opening at Rs 165 and closing at Rs 164 on its debut day.
This marked the beginning of its stock market journey, with a market cap of around Rs 4,500 crore.
7. Early Growth: Dominating the Market
From 2003 to 2010, Maruti solidified its dominance in India’s passenger vehicle market.
Models like the Alto, Wagon R, and Swift catered to diverse segments, while its extensive service network ensured customer loyalty.
By 2007, Suzuki increased its stake to 54%, and the company was renamed Maruti Suzuki India Limited.
8. Steady growth
The stock grew steadily, benefiting from India’s economic liberalization, rising disposable incomes, and a growing car-buying culture.
By 2010, the stock price had risen to around Rs 1,400, delivering over 8x returns in seven years.
9. Compounding Wealth: The Multibagger Phase
Maruti’s stock truly entered multibagger territory between 2010 and 2017. India’s GDP growth, urbanization, and easy financing fueled car sales.
Maruti’s market share hovered above 45%, with one in every two cars sold being a Maruti.
The company introduced premium models like the Ertiga and Vitara Brezza, tapping into the SUV boom.
10. All-time high
By December 2017, the stock hit an all-time high of Rs 10,000, a 60x return from its IPO price in 14 years.
The Compounded Annual Growth Rate (CAGR) from 2003 averaged around 26-35%, excluding dividends.
11. Key Drivers of Multibagger Status
Market Leadership: Maruti’s unmatched scale (over 2 million vehicles annually today) and 40-50% market share gave it pricing power and profitability.
Operational Efficiency: Low-cost production, high localization (over 90% domestic components), and Suzuki’s expertise kept margins healthy.
Economic Tailwinds: India’s middle class expanded from 50 million in 2003 to over 300 million by 2020, boosting demand.
12. Challenges and Resilience
The 2018-2020 period saw a slowdown in auto sales due to economic stagnation and stricter emission norms, pushing the stock down 30% from its 2017 peak to around Rs 7,000.
The COVID-19 pandemic in 2020 further hit sales, with the stock dropping to Rs 4,300.
13. The Multibagger Math
If you invested Rs 1 lakh in Maruti’s IPO (800 shares at Rs 125), your holding would be worth Rs 1 crore by 2017 at Rs 10,000 per share—a 100x return.
Adjusted for inflation and dividends (e.g., Rs 125/share in 2024), the real returns remain staggering.
Even from its listing price of Rs 165, the stock delivered over 75x returns by 2024, cementing its multibagger status.
14. The Future: Can It Multiply Again?
Today, Maruti faces new challenges—electric vehicles (EVs), competition from Tata Motors and Hyundai, and shifting consumer preferences.
Yet, with plans for EVs like the eVX by 2025, a Rs 38,200 crore investment to double capacity to 4 million units by 2031, and a 42% market share (2022), Maruti remains a powerhouse.
15. Maruti’s multibagger story teaches us:
Long-Term Vision: Holding through volatility (e.g., 2018-20 dips) paid off.
Growth Sectors: Betting on India’s auto sector in its infancy was key.
Brand Power: Maruti’s trust and scale made it a wealth creator.
Patience: A Rs 1 lakh investment in 2003 needed 15-20 years to become crores.
Maruti’s market share
Initially, Maruti held a 43% share in the domestic passenger vehicle (PV) market in FY24. This shows a decrease from its previous share of nearly 52% in 2019, indicating a shift in market dynamics.
Maruti Suzuki was traditionally known for its dominance in the small car segment in India, offering affordable and fuel-efficient hatchbacks that were popular among consumers. However, the industry gradually moved towards larger and more premium SUVs post-2016, causing Maruti to lose market share over the years.
Despite facing challenges, Maruti has shown resilience in its stock performance, delivering an annual return of approximately 18% over the past three years (2022-2024). This growth has been fueled by a significant increase in revenue, rising from Rs 70,372 crore in FY21 to Rs 1,41,858 crore in FY24, marking close to a 100% surge. Additionally, the company's net profit saw a substantial jump of nearly 200%, climbing from Rs 4,389 crore to Rs 13,488 crore during the same period.
On Friday (March 7, 2025), shares of Maruti Suzuki India were trading at Rs 11,678.45, up by 0.11%, around 2.40 PM.