The Rakesh Jhunjhunwala Show : Life Story of a Market Veteran

The Rakesh Jhunjhunwala Show : Life Story of a Market Veteran

Rakesh Jhunjhunwala was one of the famous marketers in the Indian market. He was nicknamed as the Big Bull of India. The Big Bull was one of the staunch believers in India’s Bull Rally of Stock Indices and companies. He was one of the early investors in Titan at Rs. 3. Some of his investments made him millions of Rupees. He originally started his market journey by being a bear. However he later shifted his capital to a bull estimation for the markets. 

Rakesh Jhunjhunwala’s Journey

Rakesh Jhunjhunwala was born on 5th July, 1960. The bull started his journey with a capital of 5000 Rs in 1985. From such a small capital he made his first big profit of 5 Lakh Rs in the very next year (in 1986). In the time period of 1986 to 1989 he made almost 25 Lakh Rs. Jhunjhunwala was featured in the film Harshad Mehta as well. He was a part of the Manubhai Squad of Bears. However post Harshad Mehta he shifted his focus to the bulls gang. He saw great potential in the Indian markets and thus started investing into the companies with high NAV but low valuation. 

During his entire market tenure he has sought huge ownership for a retail investor in Start Health and Allied Insurance Company, Tata Motors, Metro Brands Limited, Aptech Limited, Nazara Technologies Limited, Titan, CRISIL, Fortis Healthcare, etc. 

Investment Valuations

Titan shares were worth more than 1.4 billion dollars. Star Health Insurance holdings for Rakesh Jhunjhunwala were valued at 884 Million Dollars. Metro Brands Limited holdings are worth 281 Million Dollars. Tata Motors was one of the favourites of Rakesh Sir post the COVID Times. This was valued at 262 Million Dollars. CRISIL shares in the portfolio were worth 164 Million dollars. Fortis Healthcare shares were worth almost 115 million Dollars. 

Post Stock market investments he also started Hungama Digital Media in 1999 with some of his friends. Being a trader and earning huge amounts of money without any scams on their name is a real deal. Rakesh Sir was known for his financial understandings and he is also recognised by many veterans of finance fields like Uday Kotak. Rakesh Jhunjhunwala was listed as the 61st richest person in India as well. His net worth on 13th August, 2022 was 5.8 billion dollars. Unfortunately India lost this market veteran and a finance expert on 14th August, 2022.

How Did Rakesh Sir Make Investments ?

Rakesh Sir’s simple belief was following the market trends, understanding the leaders of the company, betting against the company valuations and following the market flow. These terms made him one of the most recognised traders and investors on Dalal Street.

Lets Decode the reason the biggest investment of Mr. Jhunjhunwala :- Titan

Titan remains as one of the biggest bets Mr. Jhunjhunwala ever made. The investment into Titan started from Rs. 29 per share during the 2002-03 period. The reason behind the same was undervaluation of the share. Titan was going through a rough phase at that point of time during 2001-03. The company was heavily devalued given its lower net profits and internal problems. The factory outlets of the company were about to get cut due to internal issues.

Also the company was trying to modify its entire working pattern in Europe. The focus of the company was slowly shifting towards the Jewellery business. Overall the company was undergoing large changes and all of those were affecting the valuation of the company. However Rakesh Sir noticed something that no one did. He invested a major amount of his capital in titan shares at 29 Rs of its valuation. He saw that the net profit of the company was not that bad though it showed a downward trend. The reason was the company did perform badly in 2002 but on the other hand it gave steady results in 2003.

Titan Figures and more

The figures did indicate that the net profit of the company decreased in 2003 but the reason behind the same was the provision kept aside for future losses given the change in working pattern of the company. This was one of the major reasons to start investing in the company.

On the other hand the company’s current asset value was almost 400 Crore Rs and its outstanding shares were 4.22 Crore. Thus at any given point of time the company is capable of paying off its liabilities. However the NCAV was negative in this case. But that was not much seen given the company’s growing jewellery business sales and profits and its future scope of expansion. The company already opened more than 40 outlets in that phase and was on the verge of a major expansion plan across India. This gave Rakesh Sir the confidence to invest more in T8tan. As if today the holdings in Titan by Rakesh Sir’s group is 5.5% and the valuation for the same is close to 11000 Crore Rs.

Thus value investing was the core in the playbook of the veteran of the stock market in India. He and his financial wisdom will always be remembered and his methods will become examples for the generations to come.

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