Viral post claims Jindal shares bought for ₹1 lakh are now worth ₹80 cr. True?

However, the claim is incorrect.

To be sure, the original share certificates were of Jindal Vijaynagar Steel Ltd (JVSL), which was merged into JSW Steel in 2005. But to determine the correct value of the 5,000 shares, you need to follow the timeline of JSW Steel’s corporate actions.

The correct calculation

In 2005, when JVSL merged into JSW Steel, every JVSL shareholder received one share of JSW Steel for every 16 JVSL shares. “It means if an investor held 5,000 JVSL shares (likely bought at a face value of ₹1 lakh), they would have received 312 (5,000/16) JSW Steel shares,” said Sumeet Goyal, co-founder, 3S Fintech Private Ltd, a consultancy firm that helps people recover their unclaimed assets.

This is where most people erred. Instead of dividing 5000 by 16, they multiplied it by the same number, suggesting one JVSL share had turned into 16 of JSW Steel, or that the 5,000 shares had ballooned to 80,000 after the merger.

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Then in 2017, JSW Steel underwent a stock split from ₹10 face value to ₹1 face value. “This increased the share count by 10 times,” said Goyal. With the correct calculation, the number of JSW Steel shares now stands at 3,120. The incorrect calculation suggested 800,000 shares.

At Friday’s closing price of ₹1,006.60 a share, the total value of 3,120 shares is ₹31.40 lakh, not ₹80 crore (800,000*1006.60) as the viral posts claimed.

“JSW Steel has never issued bonus shares, and no other corporate actions justify the kind of compounding claimed. The viral post is factually incorrect,” said Goyal.

Certificates were invalid anyway

It is important to note that when JVSL merged into JSW Steel in 2005, the original JVSL certificates became invalid and were replaced with new JSW Steel certificates. In 2017, those were again replaced due to the stock split.

“If someone still holds the original 1990s JVSL certificates, they are not valid proof of current shareholding. They’re likely just old paper—not ₹80 crore treasure,” said Goyal.

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Also note that investors may have sold or dematted JSW Steel shares when they got fresh share certificates in the 2005 merger and the 2017 split. In those cases, too, the original JVSL certificates are invalid.

“We come across a lot of such cases where investors have either dematted or sold new share certificates and still hold on to old invalid share certificates, which causes confusion in future,” said Goyal.

Compounding does work

The viral claim of a ₹1 lakh investment in the 1990s becoming ₹80 crore may not be true, but ₹1 lakh turning into ₹31.40 lakh in 30-35 years itself represents a decent return. The stock market offers excellent rewards if you choose fundamentally strong companies and keep reviewing their performance over the years. Another option is to start a systematic investment plan (SIP) in a couple of mutual funds.

In the mean time, if you discover physical share certificates or any other details of unclaimed shares of family members, you need to reach out to the company in question to convert the shares into demat form and transfer them to the legal heir if the original shareholder has passed away.

Also read | Unclaimed shares: A step-by-step guide for the claim and recovery process