Rakesh Jhunjhunwala: The stock market wizard whose ‘only client’ was his wife

It was 1985 when Rakesh Jhunjhunwala reached out to his brother-in-law and borrowed around Rs5,000. Rakesh’s father, an income tax officer, was okay with him investing in stocks, but he never gave him money, and also forbade him from asking his friends. That Rs5,000 (Dh231 at today’s exchange rate), which Rakesh invested at the age of 25, had grown to Rs11 trillion by 2018.

While the 2008 global recession ate chunks away from his net worth, Jhunjhunwala himself had vowed to give away at least 25 per cent of his wealth to charity. Some say he gave away much more. When the ‘Big Bull’ of Dalal Street passed away, he had a net worth of close to $6 billion.

The exponential growth of Jhunjhunwala’s portfolio mirrored the rise of the main Bombay Stock Exchange index. It was at 150 then. It trades close to 60,000 now. Jhunjhunwala had said earlier that the growth of the Indian stock market since the country’s economy was liberalised in 1991 was a big factor in his success.

Jhunjhunwala’s communication skills helped small investors understand the stock market, and his insights on the economy and companies made him a TV celebrity.

Many compared Jhunjhunwala to Berkshire Hathaway Chairman and CEO Warren Buffett, but Jhunjhunwala’s idols were US billionaire George Soros and Hong Kong investor Marc Faber.

Jhunjhunwala is survived by his wife, whom he used to call his only client, and three children. He leaves stakes in around three dozen Indian companies and a legacy of quoting one-liners like “the trend is your friend” and “the only rule I have is there are no rules”.

“All I’ve known is trading and investing. I don’t want to do anything else in life,” Jhunjhunwala once said in an interview.

His portfolio is managed by his stock trading firm RARE Enterprises, which derives its name from the first two letters of his name and his wife Rekha’s name.

Jhunjhunwala was also chairman of Hungama Media and Aptech, as well as a director of Viceroy Hotels, Concord Biotech, Provogue India, and Geojit Financial Services.

Early bets

Jhunjhunwala developed a childhood fascination for stocks by watching his father juggle market investments, and dabbled with stocks soon after graduating with honors from Sydenham College of Commerce and Economics in Mumbai.

The acquisition of Titan Ltd. shares was among his most-profitable investments. He placed his bets in early 2000s on the Tata Group firm that predominantly made watches and was struggling with labour issues. Jhunjhunwala, along with his wife, held about a 4 per cent stake as of June in Titan, which is now India’s biggest jewellery firm. The stock has surged more than 26,000 per cent since the start of 2005.

“Rakesh Jhunjhunwala believed in India and the sheer potential of the country,” N. Chandrasekaran, chairman of Tata Sons, said in a statement. “This conviction led him to consistently make bold decisions throughout his life and career.”

He made his first big profit by buying 5,000 shares in Tata Tea with borrowed money, confident the markets had under-estimated the potential of a company looking to grow at a time of rising yield production. He trebled his money within months.

Better, bigger investments followed, including a leveraged bet in the late 1980s on iron ore exporter Sesa Goa. Jhunjhunwala bought the stock at Rs60-65 and sold at Rs2,200.

An expanding portfolio

The veteran stock market investor was a self-made trader, and invested in several established businesses and startups, including the country’s newest airline Akasa Air.

His firm’s investments include many Tata Group companies, such as Tata Motors, Tata Communications and Indian Hotels Co, which runs the Taj hotels.

Other investments include Indiabulls Housing Finance, Star Health Insurance, Federal Bank and vocational training company Aptech Ltd.

He was instrumental in taking some privately held companies public, including Star Health and Allied Insurance Co. Ltd, and gaming firm Nazara Technologies Ltd.

“He was somebody who could understand how to run companies as well as the market,” said Motilal Oswal, a co-founder of Mumbai-based Motilal Oswal Financial Services Ltd., one of India’s biggest brokerages. “That’s very rare. Some of his big investments happened in recent years, when he was nearing 60s and wasn’t keeping well.”

“Investor, bold risk taker, masterly understanding of the stock market, clear in communication - a leader in his own right,” Finance Minister Nirmala Sitharaman wrote in a tribute on Twitter. “Had strong belief in India’s strength and capabilities.” Uday Kotak, CEO of Kotak Mahindra Bank, and school and college mate, said Jhunjhunwala “believed stock-India was undervalued. He is right.” Kotak said on Twitter: “Amazingly sharp in understanding financial markets. We spoke regularly, more so during COVID. Will miss you Rakesh!”

While equity investments in the world’s second-most populous nation are yet to emerge as a major source of household savings and form less than 5 per cent of assets, the south Asian nation has in recent years experienced a frenzy of retail investments in the equity market.

India has added about 58 million new retail investors, more than the population of South Korea, since the outbreak of the pandemic in early 2020.

With inputs from agencies