Rakesh Jhunjhunwala: the Indian Warren Buffet who remained middle class at heart
Based on your stock market estimates alone, you’re worth over $5 billion. How Much Wealth Do You Really Have? A TV presenter once asked Rakesh Jhunjhunwala. “If you can count it, you haven’t got it,” the self-proclaimed Warren Buffet fan shot back.
“I would drive the same car and eat the same even with 85% less wealth than today. Basically, I am a pure bourgeois. If I don’t go to the office for a few days, my wife starts asking why are you at home,” said the ace investor, who is on the Forbes list of India’s 36th richest person.
Yet his encounter with Prime Minister Narendra Modi has last become meme material for social media trolls as he wore a wrinkled shirt and loose casual trousers. “I spent ₹600 to iron the shirt and yet everything got dirty,” he later commented.
While simplicity was the hallmark of this 62-year-old investor, who earned the nickname India’s Big Bull, his lionhearted approach to investing as well as day trading was the mantra of his success, says G Devanathan, who joined as a market analyst in 2004.
“Rakesh would often say that trading had actually helped him become a better investor. He was never afraid of mistakes but made sure it wasn’t too big which might affect his survival or the put out of markets,” Devnathan said.
Although famous as an eternal bull in the stock markets, it was ironic that Jhunjhunwala, the son of a tax official, started his career alongside Manu Manek Mundra, a Kolkata-born bear trader who made his fortune largely by shorting the shares. . It was Manek’s death wish that he wanted to sell another huge batch of Reliance shares before his eyes were closed forever, say the elders who were part of the club.
Jhunjhunwala considered fellow investor ace RK Damani, D’Mart Fame, as his guru. But the elders also say that Jhunjhunwala learned his lessons from the late Big Bull Harshad Mehta and hence believed that to play India’s history one should be long in the markets and not short.
Jhunjhunwala, who started investing with $100 in 1985 when the BSE Sensex benchmark was trading just at 150, has seen his wealth multiply hundreds of times over nearly four decades, and all that was only due to his belief in Indian history and action. picking skills, say his friends.
His skills at gambling in the derivatives markets were also legendary; he was always happy if he exited some of his bets without significant loss, his close aides say.
A Bachelor of Commerce and Professional Chartered Accountant, Jhunjhunwala could solve complex math problems on the back of an envelope without any devices. This talent often came in handy in stock picking.
Its prominent investments were Titan, CRISIL, Aurobindo Pharma, Praj Industries, NCC, Aptech Limited, Ion Exchange, Fortis Healthcare, Lupin, VIP Industries, Geojit Financial Services, Rallis India, Jubilant Life Sciences, etc. derivatives, currencies and gold.
After withdrawing funds from stock markets, he invested ₹260 crore in new budget airline Akasa Airlines. In 2005, Jhunjhunwala made big money in a deal involving credit rating agency CRISIL, where he and his wife Rekha held a 14.3% stake. Major World Rankings
S&P was keen to enter India and wanted a majority stake in CRISIL. According to market rumors, then Finance Minister P Chidambaram asked Jhunjhunwala to reduce his stake in CRISIL so that S&P’s open offer could succeed. Eventually, Jhunjhunwala’s stake in CRISIL fell to around 5.5%.
His investment in the MCX commodity exchange was a story of well-timed entry and exit. Jhunjhunwala also had his close aide and partner, Amit Goela, appointed to the board of MCX.
Ramesh Damani, Madhu Kela and Jayakumar were among his close friends and entourage in the market. He would love to read The Economist after market hours and have an evening drink with friends, his colleagues say. He was so engrossed in his daily trading that Jhunjhunwala sometimes ate lunch after the markets closed at 3:30 p.m.
Insider trading case
Like any other billionaire, Jhunjhunwala has also had his fair share of controversy. On several occasions, it has come under the scanner of market regulator SEBI. Jhunjhunwala had to settle an insider trading case where, along with a few other close associates, he was being questioned for insider trading in Aptech Computers stock in 2016. Others probed in the case and who also sought settling the matter with SEBI included Jhunjhunwala’s brother, Rajesh Kumar, a chartered accountant, his wife Rekha and his mother-in-law, Sushiladevi Gupta. Ushma Sheth, the sister of Utpal Sheth, CEO of Jhunjhunwala’s flagship investment firm, Rare Enterprises, also had to settle the case.
Jhunjhunwala had also shown interest in film production and his philanthropic portfolio included nutrition and education. He pledged to donate 25% of his fortune to charity. He is survived by his wife, a daughter and twins.
August 14, 2022