04 October, Tue 2022
support@thecriticalscript.com
Blog image

The life of Rakesh Jhunjhunwala: India's Warren Buffet

13 Sep,2022 08:09 PM, by: Prasanta Nath
3 minute read Total views: 72
0 Like 0.0

“Money begets money” is a popular phrase. But for Rakesh Jhunjhunwala, it wasn’t just a saying, but his entire profession. Also known as India’s Warren Buffet, the Indian billionaire was widely famed for his hefty investments, stock market predictions, and for chairing the boards of several companies. Jhunjhunwala was also counted among the world’s 500 richest people until his sudden demise in August this year (2022).

 

Early Life & Career

 

It is interesting to note that Jhunjhunwala wasn’t born with a silver spoon. He was born to a middle-class family in Mumbai and developed his fascination for stock markets from his father, who was an income tax officer. His curiosity peaked in the field by listening to his father’s stock market discussions with his business partners.

 

Although his father encouraged Jhunjhunwala’s interest in the stock market, he never gave a single penny for investment. It was in 1985 when Jhunjhunwala (while still in college) marked his entry into the field of the stock market, using his savings.

 

His brother, Rajesh Jhunjhunwala, was a chartered accountant working with a prominent client at that time. Rakesh promised his brother's client an 18% return per year at a time when banks were only offering 10% interest. As a result, the client gave him Rs. 1,50,000, and Jhunjhunwala kept his promise. That is how he entered the markets and rose to become the "King of Dalal Street."

 

The First Bounty

 

Jhunjhunwala’s lifetime accomplishments are nothing short of an awe-inspiring movie plot. Before he moved on to generate even bigger bucks in leaps and bounds, he experienced his first stock market success in the form of five lakh rupees, which he generated from TATA TEA shares in the span of three months, amounting to a 300% profit margin.

 

During the period of 2002-2003, he made one of his most significant investments by purchasing eight crore rupees worth of Titan Ltd. shares - the stock value rose from Rs. 3 to Rs. 5 per share to a whopping Rs. 1500/- per share in the year 2020; thus making him one of the biggest and greatest investors in the Indian stock market.

 

Misfortune

 

Before coming to terms with his greatest ever investment hits during the pandemic period, Jhunjhunwala had also faced major setbacks in his career. The 2008 recession was perhaps the hardest on his career where he lost close to 30% of his portfolio worth at the time.

 

Rakesh Jhunjhunwala was also probed for insider trading. He was considered to have the UPSI (Unpublished Price Sensitive Information) for Aptech, along with Utpal Seth. The matter was finally settled in July 2021. And Jhunjhunwala regained his legendary investor status. 

 

Elevation

 

RJ managed his own portfolio as a partner in his asset management firm, RaRe Enterprise ("Ra" from Rakesh and "Re" from Rekha, his wife). Besides trading,  Jhunjhunwala was the chairman of Aptech Limited and Hungama Digital Media Entertainment Pvt. Ltd., in addition to being an active investor and co-producer of the movie "English Vinglish" starring the late Sridevi. He served on the boards of Prime Focus Limited, Geojit Financial Services, Bilcare Limited, Praj Industries Limited, Provogue India Limited, and many more companies.

 

Among the many investments made by RJ in different sectors, he had also invested in several educational and healthcare companies.

 

Prior to his sudden demise in 2022, his latest investments and endeavours included Akasa Air, which is a low-cost airline in India launched in 2021. It was developed in partnership with former Jet Airways CEO Vinay Dubey.

 

The Last Day

 

At the time of his death, Jhunjhunwala's net worth was $5.8 billion (Rs 46,000 crore). Jhunjhunwala became unwell on 14 August 2022 and was rushed to Breach Candy Hospital in Mumbai, where he breathed his last at around 6:30 a.m. Doctors later stated that he had kidney complications as well as acute multiple organ failure.

 

A lifetime's worth of reflection

 

The Indian stock market remains indebted to the paramount contributions of the likes of Rakesh Jhunjhunwala, who came from a humble background and emerged into one of the biggest names in the history of Indian trade, before leaving behind his stellar legacy.

 

Similar to the contribution of Rakesh Jhunjhunwala, many prominent Indian investors including Radhakishan Damani (Owner of D-Mart), Azim Premji (Founder of Wipro), Vijay Kedia, etc have also played significant roles in the Indian Stock Market. 

 

These people continuously inspire us to look beyond the term "gambling" when it comes to the stock market. Technology has made it incredibly simple to begin trading in the stock market. Proper strategic planning and a thorough understanding of the fundamental concepts of the stock market will aid in reaching the aim.


Disclaimer: The opinions expressed in this article are those of the author's. They do not purport to reflect the opinions or views of The Critical Script or its editor.

0 review
Ad

Related Comments

Newsletter!!!

Subscribe to our weekly Newsletter and stay tuned.