Bear or Bull, Jhunjhunwala ruled Dalal St, was passionate about all things Indian

Billionaire investor Rakesh Jhunjhunwala, 62, who passed away in Mumbai on Sunday morning following kidney-related illnesses, was part of the ‘bear cartel’ when Big Bull Harshad Mehta was the lord and master of the stock market. Years later, through a series of investments in small and mid-cap stocks, Jhunjhunwala, who celebrated his 62nd birthday a month ago, donned Mehta’s role and ironically became known as the Big Bull.

His father was an income-tax inspector who used to tell his son to read the newspapers every day, as they influenced the stock market movement.  So, Jhunjhunwala started investing in the stock market even while in college.

Also read: Investor Rakesh Jhunjhunwala, known as India’s own Warren Buffett, dies at 62

After graduating as a chartered accountant, he decided to dive headlong into the stock market. In 1985, a young Rakesh invested ₹5,000 to buy stocks, and the portfolio subsequently grew to over ₹40,000 crore.

Jhunjhunwala firmly believed that investors should focus on sectors that feed middle-class Indians, such as construction, engineering and pharma. His knowledge of Dalal Street was considered vast, and lakhs of investors followed his mantra in a bid to taste success.

In June 2002, he bought 66,4250 shares in Titan when the price was around ₹50. Today, his investment in Titan alone is worth ₹500 crore.  

Akasa Air launch

Among Jhunjhunwala’s top investments in recent times was Akasa Air, which launched exactly a week ago. The airline has ordered 72 Boeing 737 MAX8 aircraft and plans to add two aircraft every month till 2023.

One of the reasons for the promoters to launch Akasa Air was having billionaire Jhunjhunwala as one of their backers. Apart from being close to Prime Minister Narendra Modi, he publicly stated that he would continue to invest in the airline for as long as needed. He invested $50 million for a 47 per cent stake in the airline venture.

When reporters recently asked him why he was investing in a yo-yoing industry, he said he was prepared for failure. It remains to be seen whether his family will now sustain such considerable investments in a capital-intensive industry.

“We are deeply saddened by the untimely demise of Mr Rakesh Jhunjhunwala this morning,” said Vinay Dube, founder and CEO of Akasa Air, in a statement on Sunday. “Our thoughts and prayers are with Mr Jhunjhunwala’s family and friends.  May his soul rest in peace.”

“We at Akasa cannot thank Mr Jhunjhunwala enough for being an early believer in us and putting his trust and faith in us to build a world-class airline.  Mr Jhunjhunwala had an invincible spirit, was deeply passionate about everything Indian and cared greatly for the well-being of our employees and customers.  Akasa Air will honour Mr Jhunjhunwala’s legacy, values and belief in us by striving to run a great airline.”

Winning all the way

Jhunjhunwala’s company, Rare Enterprises, gets its name from the first two letters of its promoters — Rakesh and his wife Rekha. The couple have a daughter and two sons who are twins.

The ace investor famously said his net worth fluctuates 5 per cent weekly. Known for picking the right stocks when their share prices are trading at all-time lows, only to see them rise to stratospheric heights, Jhujhunwala never had to face any significant setbacks in his stock portfolio.

He once told a journalist that he very rarely replies to any mail. “I have no motive, no customers, no clients, except Mrs Jhujhunwala, and she’s a captive customer,” he quipped.

Bulls and bears

Jhunjhunwala was quite active even when Harshad Mehta was ruling the stock market. He earned a lot of money by shorting stocks post the Mehta scam, and was part of the ‘bear cartel’ along with the likes of Manu Manek and RK Damani.

(‘Bears’ are investors who believe the markets are poised for a drop, and attempt to short-sell. ‘Short selling’ is a way of trading an asset such that it provides a profit if there’s a drop in price.)

With his associates, Jhunjhunwala held 33 stocks at the time of his demise. Among these are Titan Company, Tata Motors, Star Health and Allied Insurance Company, Metro Brands, Fortis Healthcare, Nazara Technologies, Federal Bank, Delta Corp, DB Realty and Tata Communications.