The share price of MRF, which already is the most expensive stock in the market, further rose to hit a new milestone yesterday.
MRF Becomes First Stock To Hit ₹1 Lakh Mark
Futures contracts of Indian multinational tyre manufacturer MRF crossed the ₹1 lakh mark briefly on Monday, thus becoming the first company to cross this milestone. MRF's May 2023 futures opened at ₹98,560 and touched a high of ₹1,00,184 before closing at ₹98,353 yesterday.
While on BSE and NSE, MRF shares fell just short of touching the ₹100,000-level, hitting its all time high of ₹99,879.65 on BSE and ₹99,933.50 on NSE. MRF's shares are up more than 10% this year till date and nearly 43% up in last one year.
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MRF shares currently have the highest denomination among all the companies listed in India. Though the price denomination of a share has little relevance, investors, mostly the retail ones, shy away from buying such stocks on the notion that these are expensive shares.
Whereas more seasoned investors evaluate shares on the basis of financial ratios, as per ET report,On the basis of Price to Earnings Ratio, analysts opine that MRF shares are expensively valued, with its PE ratio currently being 50.7.
Generally, a PE ratio of around 20 is deemed ideal, but the lower, the better, as investment opportunities can turn out be more attractive for such share.
Why MRF Shares Are Valued So Highly
A key reason for MRF's higher stock price denomination is that the company has never split its stock or rarely diluted its shareholding.
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MRF reportedly has a total of 42,41,143 shares, out of which 30,60,312 shares are owned by public shareholders, representing 72.16% of the total company equity. Promoters hold 11,80,831 shares, constituting 27.84% of the total equity. The company's total market capitalization is ₹415 billion.
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