Posted by You must know that the stock market is a place that rewards those who remain patient. But you may also want to know that it’s a place where you can get lucky in the short term with a few right stocks in the portfolio. However the probability of becoming wealthy in the short-term is very rare.
If you are someone new to equity investments and don’t know what the term multibagger means then now is the time to know and add this word to your stock market vocabulary.
Multibagger
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Stock that delivers exponential returns usually several times their costs are called multibaggers.
- A stock that grows two times its price is called two-bagger, a stock that jumps ten times its cost is called ten-bagger. And multibaggers are stocks that grow multiple times their initial price. These are primarily undervalued stocks with strong fundamentals and immense potential to grow.
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Two years ago on 23 March 2020, stock markets plunged to their lowest in over four years. But little did we know that it was the beginning of the Bull Run. The Bull Run not only pushed the benchmark indices two new all-time highs, but also gave rise to new multibaggers.
According to a recent article in the Economic Times, the stock markets churned out 733 multibaggers in the last two years. There are 365 days in a year and 730 days in two. That means there was one multibagger a day over the last two years. However, the list does not include stellar IPO listings during the pandemic.
Of the 733 multibaggers, 54 stocks soared over 1000%. Check out the list below.
| Company Name | 25 Mar 2022 | 23 Mar 2020 | Return (in%) |
| Tata Teleservices (Maharashtra) | 167.7 | 1.99 | 8327.14 |
| Brightcom Group Ltd. | 89.5 | 1.55 | 5674.19 |
| 3i Infotech Ltd | 543 | 1.24 | 4279.03 |
| Tanla Platforms Ltd | 1368.1 | 40 | 3320.25 |
| Share India Securities Ltd | 1167.5 | 44.45 | 2532.47 |
| Khaitan Chemicals & Fertilizers Ltd | 124.1 | 4.78 | 2496.23 |
| Vishnu Chemicals Ltd | 1724.35 | 72.1 | 2291.61 |
| Adani Total Gas Ltd | 2053.65 | 89.1 | 2204.88 |
| Nahar Spinning Mills Ltd. | 573.7 | 25 | 2194.80 |
| Globus Spirits Ltd. | 1484.7 | 66.9 | 2119.28 |
| Nahar Poly Films Ltd | 557.95 | 26.75 | 1985.79 |
| PG Electroplast Ltd | 708.6 | 35.15 | 1915.93 |
| Syncom Formulations (India) Ltd | 11.53 | 0.59 | 1854.24 |
| Everest Kanto Cylinder Ltd | 239.45 | 12.55 | 1807.97 |
| Urja Global Ltd | 17.59 | 0.95 | 1751.58 |
| Borosil Renewables Ltd | 587.95 | 32.5 | 1709.08 |
| Saregama India Ltd | 4413.95 | 247.45 | 1683.77 |
| DB Realty Ltd | 94 | 5.29 | 1676.94 |
| Kopran Ltd | 299.35 | 16.95 | 1666.08 |
| Intellect Design Arena Ltd | 858.55 | 48.65 | 1664.75 |
| Greenpanel Industries Ltd | 540.7 | 31.25 | 1630.24 |
| PTC Industries Ltd | 4401.95 | 255.1 | 1625.58 |
| Company Name | 25 Mar 2022 | 23 Mar 2020 | Return (in%) |
| Godawari Power And Ispat Ltd. | 388.75 | 23.25 | 1572.04 |
| Mastek Ltd | 3047.45 | 191.85 | 1488.45 |
| Trident Ltd | 52.25 | 3.31 | 1478.55 |
| BCL Industries Ltd. | 498.85 | 31.7 | 1473.66 |
| Tata Elxsi Ltd | 8440.85 | 545.75 | 1446.65 |
| Adani Enterprises Ltd | 1869.6 | 123.35 | 1415.69 |
| Gulshan Polyols Ltd | 374.45 | 24.85 | 1406.84 |
| Butterfly Gandhimathi Appliances | 1380.7 | 93.85 | 1371.18 |
| KPIT Technologies Ltd | 591.6 | 40.5 | 1360.74 |
| JTL Infra Ltd | 253.2 | 17.77 | 1324.87 |
| Adani Green Energy Ltd | 1922.45 | 134.95 | 1324.56 |
| Kabra Extrusiontechnik Ltd | 505.7 | 36.5 | 1285.48 |
| Balaji Amines Ltd | 2993.8 | 217.15 | 1278.68 |
| Pokama Ltd | 713.4 | 52.55 | 1257.56 |
| Poonawalla Fincorp Ltd. | 253.3 | 19.05 | 1229.66 |
| Adani Transmission Ltd | 2443.9 | 185.75 | 1215.69 |
| Ganesh Housing Corporation Ltd | 259.6 | 20.25 | 1181.98 |
| Gokaldas Exports Ltd. | 409.65 | 32.55 | 1158.53 |
| Olectra Greentech Ltd. | 625.6 | 50.2 | 1146.22 |
| Fineotex Chemical Ltd. | 164.45 | 13.45 | 1122.68 |
| Acrysil Ltd | 797.1 | 66.45 | 1099.55 |
| Expleo Solutions Ltd | 1641.95 | 137.15 | 1097.19 |
| Company Name | 25 Mar 2022 | 23 Mar 2020 | Return (in%) |
| HLE Glascoat Ltd. | 5747.5 | 490.6 | 1071.52 |
| Manali Petrochemicals Ltd. | 110.4 | 9.5 | 1062.11 |
| Mcleod Russel India Ltd. | 226 | 1.95 | 1058.97 |
| Jain Irrigation Systems Ltd. | 40.65 | 3.55 | 1045.07 |
| Venus Remedies Ltd. | 289.15 | 25.3 | 1042.89 |
| Reliance Power Ltd. | 12.99 | 1.14 | 1039.47 |
| Tejas Networks Ltd | 384.3 | 33.75 | 1038.67 |
| Jaiprakash Power Ventures Ltd. | 6.87 | 0.61 | 1026.23 |
| Sarda Energy & Minerals Ltd | 1145.15 | 101.75 | 1025.45 |
| Subex Ltd. | 34 | 3.05 | 1014.75 |
Tata Teleservices Ltd., a Tata Group company topped the list with 8,327% from the lows of 24 March 2020. On this day the stock was available for Rs. 1.99. As on April 13 the stock was trading at 185.15.
Brightcom Group Ltd. came second thanks to the stellar rise of 5,675%. The scrip moved from Rs. 1.55 to Rs. 95.95 on 13 April 2022.
3i Infotech, Tanla Platforms, Share India Securities, Khaitan Chemicals, Vishnu Chemicals, Adani Total Gas, Nahar Spinning Mills and Globus Spirits were among other top multibaggers in the last two years. All these stocks soared over 2000% from their lows of March 2020.
You may now believe the stock market is a place to make quick money. But it is not.
In spite of a stellar Bull Run post the March 2020 crash and swift recovery across sectors some counters have not been able to recover from the pandemic crash. They have delivered weak returns.
While there are stories of these multibaggers, there were a few wealth destructors as well. These stocks tumbled up to 78% since the beginning of the pandemic eroding investors’ wealth.
Kishore Biyani’s Future Lifestyle Fashions topped the list of destructors with 78% decline. The stock plunged to Rs. 36 on April 13 from the close of Rs. 168 on March 23, 2020.
GE Power India, Yes Bank, Future Retail and Future Supply Chain are some of the stocks that are down over 60% from the 23 March 2020 lows. Omaxe, Future Consumer, Future Enterprises and Spandana Sphoorty Financial Ltd. are down between 40-50% from their March 2020 lows.
Poor fundamentals, high-debt, sub-standard corporate governance practices, and poor demand from consumers are the reasons behind weak performance of these stocks.
Moral of the story
The stock market is a place of winners and losers. It rewards the companies with strong fundamentals and those with poor fundamentals find themselves at the bottom of the ladder after the initial euphoria.
We don’t mean people do not gain in the short-term. We just mean the gains are volatile and not substantial enough to create wealth for investors.
The only way to create wealth is to invest for the long-term in well-researched companies that show promise.
Would you like to become a long-term wealth creator? Then, subscribe to 5 in 5 Wealth Creation Strategy today.