It’s not often you see a single stock's price shoot up by over₹4,000 in just a few hours. For context, that’s more than what many people invest in the market in an entire year. But that’s exactly what happened with MRF, the tire company known for holding the title of India's most expensive stock.So, what caused this sudden and dramatic surge?The spark that lit the fire wasn't a groundbreaking company announcement or a blockbuster earnings report. Instead, it was a piece of news from the government. Buzz began to circulate that there could be a significant cut in the Goods and Services Tax (GST) levied on tires.For the tire industry, this is huge news. A lower tax rate could make tires cheaper for everyone, from car owners to trucking companies. Cheaper prices often lead to higher demand, and for a market leader like MRF, a potential jump in sales is a very big deal. Investors reacted almost instantly to this positive outlook, and the buying momentum sent the stock soaring. On Monday, the share price saw a healthy jump of more than 2.70%, hitting an intraday high of₹1,54,055.This event naturally brings up a question many people have about MRF: Why is a single share so incredibly expensive in the first place?The main reason is surprisingly simple. Unlike most companies, MRF has not split its shares in decades. A stock split is when a company divides its existing shares into multiple new ones to make them more affordable for smaller investors. For example, a company might split a₹10,000 share into ten shares of₹1,000 each. By not doing this, MRF has kept a relatively small number of shares in circulation, which makes each one inherently more valuable.Of course, it’s not just about a technical decision. MRF has built a rock-solid reputation over many years for its strong performance and dominant position in the tire market. Investors see it as a stable, long-term bet, and that confidence is reflected in its premium price tag.Interestingly, this surge comes at a time when the company’s recent financials showed some challenges. In its latest quarterly results, MRF reported a drop in net profit due to rising costs of raw materials. However, its revenue from operations actually saw an increase, showing that demand for its products remains strong.The recent stock jump serves as a perfect reminder of how market sentiment works. While a company's financial health is crucial, external factors like a potential government tax cut can completely change the mood overnight, turning a regular day into a remarkable one.
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