At $216 per share, Apple - already the world's most valuable company - would be worth about $1.3 trillion (roughly Rs. 7,98,90,070 crores), or about the size of South Korea's gross domestic product.
The company is valued at just over $700 billion (roughly Rs. 43,61,469 crores) currently.
Icahn said Apple should be trading at 20 times earnings per share, which taken together with net cash of $22 per share works out to $216 per share.
"This is why we continue to own approximately 53 million shares worth $6.5 billion (roughly Rs. 40,595 crores), and why we have not sold a single share," Icahn said in a letter to his Twitter followers.
"Also, to the extent Apple introduces a TV in FY 2016 or FY 2017, we believe this 20X multiple is conservative," he wrote.
Icahn, one of Apple's top 10 investors, has long urged the company to buy back more shares and raise its dividend.
He said in October that Apple shares could double in value and urged the board to buy back more shares using its cash pile. At the time, the shares were trading at $100.
"...We look forward to the capital return program update in April, anticipating it will include a large increase to share repurchases," Icahn wrote.
Apple had cash reserves of about $178 billion (roughly Rs. 11,11,679 crores) as of December 27, enough to buy IBM or the equivalent of $556 for every American.
Apple said last April it would return more than $130 billion (roughly Rs. 8,11,900 crores) to shareholders by the end of 2015.
According to StarMine's intrinsic valuation model, Apple should be trading at $140.90. That implies a compounded annual earnings growth rate of 9.9 percent over the next 10 years.
Apple shares closed 2.3 percent higher at $124.88 on the Nasdaq on Wednesday. Up to Tuesday's close, the stock had gained more than 22 percent since October 9.
© Thomson Reuters 2015