How to become rich: This Rs 25,000 investment turned into Rs 1.6 crore today; check out this crorepati maker

How to become rich: This banking share turned investors into crorepatis! It rose from Rs 31.46 per stock levels to around Rs 675 per stock levels!

How to become rich: The reason for the rise in this banking stock to such levels is due to its being a favourite of the FIIs as portfolio stock. Photo: Reuters

How to become rich: While investing in the stock market, diversification of the portfolio is a must. Share market experts are of the opinion that diversification of portfolio helps you hedge against losses in one specific sector. Hence, it's better to invest in both cash and F&O if someone is planning to invest in equities. Crorepatis are created through long-term investments. How effective a long-term investment in stocks is can be easily understood if someone goes through the movements shown by Axis Bank stock over the last 15 years. The banking stock had a closing at Rs 31.46 per stock levels on October 11, 2004. Today, Axis Bank share price is around Rs 675 per stock levels!

Therefore, if someone had invested in Axis Bank shares, his or her one rupee would have turned into Rs 21.45! It means his or her portfolio would have appreciated by 21.45 times! Leaving the dividends and share split benefits that a listed company gives to its shareholders from time to time, one can see that the Axis Bank share price soared 21.45 times in exactly 15 years. So, if someone had invested Rs 25,000 in Axis Bank stocks on 11th October 2004, this is certainly not a big sum, his or her investment would have become Rs 1.6 crore, excluding dividends and split offers announced by the bank during this period.

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Speaking on the reason for the rise in Axis Bank by such a humongous amount, Prakash Pandey, MD & CEO at Plutus Advisors said, "In early 21st century, Indian economy had started to witness the benefits of liberalisation and foreign institutional investors had begun investing in Indian stock market. Axis Bank (that time UTI Bank) being among the major private players in the Indian banking system along with some other private banks, were doing well at that time. So, fundamentally the Axis Bank share was quite strong and due to this reason, it has always remained a preferred portfolio stock for the FIIs. Even today, Axix Bank is a favorite banking stock to buy for the FIIs." Prakash Pandey said that even today, a share market investor can take a buy position in the Axis Bank counter for the target of Rs 740 to Rs 750 per stocks in 2-3 months time.

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