Why MRF Share Price is So High? (The Insider Truth)
why mrf share price is so high

Currently, the most valuable stock in India is Reliance Ltd. But when comes the most expensive stock in India is MRF Ltd. MRF is a tyre manufacturer in India. We all know MRF is a well-reputed company with a much higher price than its peers in the sector.

In this context, we will discuss why the MRF share price is so high in India and also see what makes it so expensive.

About MRF Company 

Madras Rubber Factory Limited or MRF is the largest tyre manufacturing company in India with a market share of 29 per cent (approx). Nevertheless, the company also has different business segments apart from tyres such as sports, paints & coats and toys for kids. These products are 

  1. Tyres
  2. Sports goods
  3. Paints & Coats
  4. Toys 

The company was founded in 1946 in Tamil Nadu and is a well-reputed tyre company in India. 

Brief description of MRF share price

In the last 5 years, the MRF share price has increased by 29.55% in January 2023. Interestingly, why is the MRF share price so high and consistently maintained performance? 

It is the most common question among investors. MRF shares are one of the most expensive on India's stock exchange. 

mrf share price chart from start to today

If an investor invested ₹10,000 in MRF 12 years ago now the investor would make a profit of more than 860% approximately. The current investment value would be ₹86,000. 

This often means that MRF is expanding steadily and that its investors have not been deterred by the company's rising share price over time. This is a very unusual stock and therefore it makes sense that people are wondering why MRF's share price is so high.

Why is MRF's share price so high? 

Few companies break their shares into a number of shares through stock splits whereas, some companies do not issue stock splits. MRF, among them, did not split its shares. 

First of all, we should know what a stock split is. A stock split is a kind of corporate action taken by the company's board of directors. 

To make a company more accessible at a lower cost and to improve market liquidity, a company's value is further broken down with a stock split. 

MRF is a company that does not perform any kind of corporate actions. Hence, this is the primary and number one reason MRF share price is so high.

Why is MRF not splitting stocks? 

1. Strong Fundamental 

The performance of MRF shares is extraordinary because of strong fundamentals. Despite being expensive, the share still attracts investors and investors who had invested in it generated a potential profit. Hence, the company is growing continuously at the same pace. Since the company's listing, it has given its investors growth benefits. 

2. Limited Public shareholding 

The company had issued limited shares to retail investors and listed the shares at a high price. The company provides only voting rights to limited investors in the market. After all, the most crucial decision is taken by the promoters of a company because they hold the majority of the shares of the company. 

3. Stay Away from Speculators 

Stock splits decrease the share of the company which attracts more Speculators thus increasing volatility. But MRF does not selectively split the shares that keep Speculators away from the claims. It makes the claims more rigid and available for genuine investors. 

4. No Financial benefits 

At last, the stock split does not provide any financial benefits to the company. So, the company does not need to split the shares.

Bottom Line 

MRF is the most profitable and stable stock in India. It began as a tiny trading company that dealt with leather and rubber products, but it has since developed into one of India's most renowned and significant tyre manufacturers.

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