Meet Rakesh Jhunjhunwala
It’s 1985. Benchmark equity index Sensex is around 150 points. Rakesh Jhunjhunwala, a first-year college student, decides to take a plunge into the stock market with a modest sum of Rs 5000.
Skip to 2021, the Sensex has crossed 60,000 and Jhunjhunwala is currently is the 36th richest man in India with a net worth of $6 billion.
Hailed as India’s Warren Buffett for his skill of identifying the hidden gems in the stock market, he’s also known as the man with a Midas touch. And not without reason. Several of his stocks have grown over the years to be multibaggers.
Jhunjhunwala clocked his first big profit in 1996. He bought 5,000 shares of Tata Tea for a price of Rs 43 per share, which then rose to Rs 143 per share within three months.
The success with the Tata Tea trade was great, but it was short-term in nature.
It’s no surprise that Jhunjhunwala, the big bull of the Indian stock market and known for his staunch belief in long-term value investing, was once a bear and drawn to the allure of making a quick buck through trading stocks.
Back in the ‘90s, Jhunjhunwala made money by short-selling stocks and was part of Manu Manek’s Bear Cartel. Radhakishan Damani, ace investor and founder of supermarket chain DMart, was also part of this group.
But over time, his views changed and Jhunjhunwala pivoted to being a value investor after being inspired by RK Damani himself.
In 2003, Jhunjhunwala established his own trading firm called RaRe Enterprises and was an early investor in firms like Titan, CRISIL, Sesa Goa, Praj Industries, and Aurobindo Pharma.
Currently, his portfolio has 39 stocks, and the combined value of his stake in these companies is over Rs 24,424.2 crore as of the quarter ending September 2021.
Jhunjhunwala, once again following the footsteps of his mentor RK Damani, who successfully pivoted from a successful value investor to an entrepreneur, has started the next part of his journey.
He announced earlier this year that he’s going to foray into the aviation sector with Akasa Air, along with the former CEO of IndiGo, Aditya Ghosh, and Vinay Dube, former CEO, Jet Airways.
The airline is expected to start operations soon. But will this pivot from an investor to an entrepreneur work in his favor as it has done for Damani? The jury is still out on that.