If one goes just by the estimates of your stock market portfolio, you are worth more than $5 billion. How much wealth do you actually have? A television anchor once asked Rakesh Jhunjhunwala. “If you can count it, you don’t have it,” shot back the self-styled fan of Warren Buffet.
“I would be driving the same car and having the same food even with 85 per cent less wealth than now. At heart, I’m pure middle-class. If I don’t go to the office for a few days, my wife starts asking why you are home,” said the ace investor, who made it to the Forbes list of India’s 36th richest person.
Yet his meeting with Prime Minister Narendra Modi last became meme material for the social media trolls since he wore a crumpled shirt and baggy casual pants. “I spent ₹600 for ironing the shirt and yet it got all soiled,” he later commented.
While simplicity was the hallmark of this 62-year-old investor, who earned the sobriquet of India’s Big Bull, his lion heart approach in investing as well as trading was the mantra for his success, says G Devanathan, who joined him as a market analyst sometime in 2004.
“Rakesh would often say that trading had actually helped him become a better investor. He was never scared of mistakes but ensured that it was not too big, which could affect his survival or put him out of the markets,” said Devanathan.
Though he was famous as an eternal bull in the stock markets, it was ironic that Jhunjhunwala, the son of an income tax officer, started his career alongside Manu Manek Mundra, a Kolkata-born bear operator who made his wealth largely by shorting the stocks. It was Manek’s death wish that he wanted to short one more huge lot of Reliance shares before his eyes closed forever, old timers who were part of the club say.
Jhunjhunwala considered another ace investor RK Damani, D’Mart Fame, as his Guru. But old-timers also say Jhunjhunwala learned his lessons from the late Big Bull Harshad Mehta and hence believed that to play the India story, you have to be on the long side of the markets and not short.
Jhunjhunwala, who had begun investing with $100 in 1985 when the BSE benchmark index Sensex was trading just at 150, saw his wealth multiply by several hundred times in nearly four decades, and all this was only due to his belief in the India story and stock picking skills, say his friends.
His skills at the derivatives markets, too, were legendary; he was always happy if he got out of some of his bets without significant loss, say his close aides.
A bachelor of commerce and a professional chartered accountant, Jhunjhunwala could perform complex mathematical problems at the back of an envelope sans any devices. This knack of his proved often useful in stock picking.
His significant 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. Besides, he loved to dabble in derivatives, currency and gold.
After withdrawing funds from stock markets, he invested ₹260 crore in the new budget airline company 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 per cent stake. Global ratings major
S&P was keen to enter India and wanted a controlling stake in CRISIL. Market rumours said that the then Finance Minister P Chidambaram requested Jhunjhunwala to pare his stake in CRISIL so that S&P’s open offer could succeed. Eventually, Jhunjhunwala’s stake in CRISIL fell to around 5.5 per cent.
His investment in commodity exchange MCX was a story of entry and exit at the right time. Jhunjhunwala also had his close aide and partner, Amit Goela appointed to the board of MCX.
Ramesh Damani, Madhu Kela, and Jayakumar were some of his close friends and inner circle in the market. He would love to read The Economist after market hours and enjoy drinks in the evening with friends, his colleagues say. He was so engrossed in his daily trading that Jhunjhunwala would sometimes have lunch after the markets closed at 3.30 pm.
Insider trading case
Like any other billionaire, Jhunjhunwala also had his fair share of controversies. On more than a couple of occasions, he came under the scanner of market regulator SEBI. Jhunjhunwala had to settle an insider trading case where, he along with a few other close associates, was being probed for insider trading in the shares of Aptech Computers in 2016. Others being probed in the matter and who have also sought to settle the matter with SEBI included Jhunjhunwala’s brother Rajesh Kumar a chartered accountant, wife Rekha, and mother-in-law, Sushiladevi Gupta. Ushma Sheth, the sister of Utpal Sheth, CEO of Jhunjhunwala’s flagship investment company Rare Enterprises, also had to settle the matter.
Jhunjhunwala had also shown interest in film production, and his philanthropic portfolio included nutrition and education. He had pledged to give 25 per cent of his wealth to charity. He is survived by his wife, a daughter and twin sons.