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    Rakesh Jhunjhunwala: Always commanding, mysterious, unpredictable and bullish

    Synopsis

    ​​Even as many swashbuckling traders and speculators of yore faded away because they were unable to keep pace with the changing face of the Indian stock market, Jhunjhunwala, also known as Rocky in the market, segued effortlessly into the more formalised market system and some of his farsighted bets over the past two decades helped him amass wealth, earning him a cult following across the country.

    Rakesh JhunjhunwalaIANS
    His journey from a middle-class Mumbai Marwari family in the 1980s to one of the richest investors is part of market lore. A chartered accountant by training, Jhunjhunwala began dabbling in stocks in 1985, when he was still in college.
    Mumbai: Billionaire investor Rakesh Jhunjhunwala, 62, passed away in Mumbai on Sunday after succumbing to multiple organ failure, marking the sunset of a flamboyant era on Dalal Street. Dubbed India’s Warren Buffett and Big Bull by admirers, his stock picks and journey toward becoming a billionaire captured the imagination of thousands of market participants and symbolised their ambition to make their stock market fortunes. His death came about a week after the airline he co-founded, Akasa Air, took to the skies. Jhunjhunwala attended the launch of the airline on a wheelchair.

    Political leaders and corporate leaders paid tribute to Jhunjhunwala.

    Prime Minister Narendra Modi said, “Rakesh Jhunjhunwala was indomitable. Full of life, witty and insightful, he leaves behind an indelible contribution to the financial world. He was also very passionate about India’s progress. His passing away is saddening. My condolences to his family and admirers. Om Shanti.”

    With holdings worth Rs 29,700 crore on Friday in listed stocks such as Titan, Star Health, Tata Motors and Crisil among others, the maverick investor had the numbers to inspire awe in the market. Even as many swashbuckling traders and speculators of yore faded away because they were unable to keep pace with the changing face of the Indian stock market, Jhunjhunwala, also known as Rocky in the market, segued effortlessly into the more formalised market system and some of his farsighted bets over the past two decades helped him amass wealth, earning him a cult following across the country.

    His journey from a middle-class Mumbai Marwari family in the 1980s to one of the richest investors is part of market lore. A chartered accountant by training, Jhunjhunwala began dabbling in stocks in 1985, when he was still in college. The Sensex was at 150 then. He started off as a trader and speculator, making a quick buck flipping stocks aggressively.

    “When I first met him in 1988, I knew I had met a person who was different,” said Motilal Oswal Financial Services co-founder and chairman Raamdeo Agarwal, a long-time friend of Jhunjhunwala. “He was focused, had the courage to leverage big and had the guts to take contrarian views.” A high networth investor and friend, who did not want to be identified, said Jhunjhunwala had the memory of an elephant and had developed an instinct as an investor and trader that few in the market had.

    Swimming against the tide worked well for Jhunjhunwala. The turning point of his career was in 1990 when he bet against the Street consensus. While the bearish market was expecting that Madhu Dandavate, finance minister in the VP Singh-led government, would stick to his socialist credentials in that year’s budget, Jhunjhunwala bet the PM would not do anything to hurt businesses. His wager worked, catapulting him into the big league and brought him to the notice of the big guns on Dalal Street.

    Before being referred to as Big Bull in the latter part of his career for his Midas touch when it came to picking winners,

    Jhunjhunwala was a short-seller in the 1990s when the proverbial bull-bear fight was at its fiercest. Being part of the bear camp, which had pitted itself against Harshad Mehta — the original Big Bull of Indian equities — Jhunjhunwala had his moments of nervousness with bears on the verge of getting squeezed out of the market on account of the unprecedented surge in stocks. But, as the 1992 scam unraveled and the stock market collapsed, the persistent bears, including Jhunjhunwala, made a killing.


    He often said, “It’s not what you buy, but the price at which you buy.” This investment philosophy aided his judgment while purchasing stocks that had lost their lustre such as Titian and Lupin in the early 2000s. For instance, when he first bought Titan in 2002-3 from a New York-based, high-profile fund manager, it was a poor performer trading at single-digits with company's debt several times its market capitalisation. Oldtimers said he bought the stock all the way to Rs 150. At Rs 2,472 per share, the holding of Jhunjhunwala, who owns around 5% in the company, is now worth about Rs 11,100 crore.

    Jhunjhunwala’s big bets in the stock market often centered around his bullishness on India and its consumer market. His latest investment in Akasa Air, an airline startup, had raised eyebrows as the sector has struggled to be profitable. A co-founder, he bought a 40% stake for $35 million.

    While he altered his investments and trading strategies to suit changing times, Jhunjhunwala refused to conform to the political correctness of the more-formalised stock market milieu. As someone who was known to fly off the handle, he would doze off during lengthy corporate board meetings. While he sneered at television anchors during discussions, some of his maxims made a section of viewers uncomfortable. On value investing, he would often say, “If the girl is pretty, the suitor will come.” He also compared markets to “women — always commanding, mysterious, unpredictable and volatile.”

    Notwithstanding the eccentricities, Jhunjhunwala managed to amass a following of investors who blindly piggybacked his trades in the hope of making a fortune like he did. He did not need an army of spin doctors to make this happen. The record spoke for itself.



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