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Rakesh Jhunjhunwala | His greatest investment hits, and odd misses

The trader-turned-investor has left behind a legacy of taking the equity cult to the masses in his inimical style and a portfolio worth nearly Rs 32,000 crore

MUmbai / August 15, 2022 / 02:03 PM IST
Rakesh Jhunjhunwala passed away aged 62 on August 14, 2022.

Rakesh Jhunjhunwala passed away aged 62 on August 14, 2022.

 
 
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Rakesh Jhunjhunwala, the biggest and most vociferous believer in India’s potential, both economic and social, passed away on the morning of August 14, the eve of the country’s 76th Independence Day.

The trader-turned-investor leaves behind a legacy of taking the cult of equity to the masses in his inimical style and a portfolio worth nearly Rs 32,000 crore.

Over the past 26 quarters, Jhunjhunwala's net worth grew from Rs 8,366 crore to Rs 32,000 crore, according to data compiled by Trendlyne. Of the 26 quarters, his portfolio gave negative returns only in 10. The coronavirus pandemic proved to be immensely successsful for him, as his portfolio quadrupled since March 2020.

Jhunjhunwala spent the initial part of his career on Dalal Street as trader, mostly as a short seller, during the exponential growth phase triggered by the original Big Bull of Indian equity market Harshad Mehta in the late 1980s and early 1990s.

Jhunjhunwala pumped in his trading profits into investment bets and became increasingly famous as the "Warren Buffett of India" because of some of the greatest investments made by a singular individual on these shores.

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Also Read: I'm prepared for Akasa’s failure, says Rakesh Jhunjhunwala

Here is a list of some of the famous bets made by the veteran investor most of which were successful and sometimes not so much:

Hits 

1. Titan

The stock that elevated Jhunjhunwala from just another successful investor to one of the world’s greatest. Jhunjhunwala got in on Titan in the aftermath of the dot com bubble in the early 2000s, buying around 6 crore shares at an average price of Rs 3 a share.

His staunch belief in the country’s consumer story, Titan’s expansion into jewellery business along with the Tata Group’s lineage—the Group he counted as one of his inspiration and which also gave him his first big profit—convinced Jhunjhunwala to hold the stock. Today, Jhunjhunwala’s stake in Titan is worth more than Rs 11,000 crore, a third of his portfolio.

Also read: Rakesh Jhunjhunwala on Tata Group: 'The house of Tatas is blessed by God'

2. Tata Tea

Perhaps one of his earliest investing bets. Jhunjhunwala bought Tata Tea shares back in 1986, believing that the market was under-appreciating the benefits of rising yield in the production of tea that Tata Tea was experiencing. His investment at Rs 143 a share rose to Rs 2,200 where he ultimately exited the stock.

3. Crisil

Another great bet from the early 2000s, Jhunjhunwala, along with his wife, started investing in Crisil from 2003 and by 2005 had accumulated a more than 8 percent stake. He believed that India’s growing financial services sector and debt markets would require a credit-rating agency to help investors and bankers assess creditworthiness. His stake in Crisil is now worth more than Rs 1,300 crore.

Also read: PM Modi leads the country in paying tribute to ace investor

4. Nazara Technologies

A private market bet that turned into a public market success. Jhunjhunwala’s investment in Nazara Technologies happened when the company was in the unlisted market. The ace investor acquired a minority stake in the gaming company in 2017, which proved to be prescient, given the acceleration in online gaming across the world during the past two years aided by the COVID-19 pandemic. The stock went on to triple from its 2021 public offering price of Rs 1,101 a share but is currently sitting at Rs 644.

5. Metro Brands

Another bet on India’s consumption story, Jhunjhunwala and his wife invested in Metro Brands in 2007, as India’s footwear market entered an extended period of growth driven by rising per capital income, urbanisation and premiumisation. While the quantum of the initial investment by Jhunjhunwala is unknown, today Metro Brands is one of the biggest bets in Jhunjhunwala’s portfolio, worth Rs 3,348 crore.

Also read: Remembering Rakesh Jhunjhunwala: The veteran investor's role models

Misses

1. Dewan Housing Finance

Perhaps one of the biggest miscalculations of Jhunjhunwala’s investing career. In 2013, Jhunjhunwala bought 25 lakh shares of the housing finance company at Rs 135 a share for Rs 34 crore, probably trying to play the real estate cycle that was about to enter a recessionary period. In 2018, when DHFL found itself at the centre of the financial crisis in India’s non-banking finance companies triggered by the collapse of Infrastructure Leasing & Financial Services Limited, Jhunjhunwala doubled down on his bet, buying another 0.43 percent stake. The company faced liquidation a few years later.

2. Mandhana Retail

Jhunjhunwala’s bet on the retailer for Salman Khan’s ‘Being Human’ brand also bombed. The ace investor bought around 12.7 percent stake in the company in 2016 when the stock was trading at around Rs 247 a share and exited when it was trading near Rs 16 a share in October-December 2021.

3. DB Realty

Another stock where Jhunjhunwala’s optimism has been misplaced, so far, is the real estate firm DB Realty. Jhunjhunwala first bought a stake in the real estate firm in 2012 just as the sector was about to enter one of its worst downcycle that would eventually last till the COVID-19 pandemic. At the time, DB Realty seemed an odd investment for the ace investor, given his general disdain for real estate companies, which he had avoided during the boom years of 2004-2011. However, convinced that the company was worth the risk, Jhunjhunwala earlier this year bought 2 crore warrants of the company that would eventually be converted into stock. His investment is down 32 percent.

4. Private equity

After his successes in the public market, Jhunjhunwala started investing in private market firms towards the second half of 2000s to get in early in the next big thing. Perhaps inspired by the successes of Google, Alibaba, Amazon and Facebook in the US, Jhunjhunwala started investing in firms like Metro Brands and Star Health Insurance. The ace investor in an interview last year admitted that many of his private equity investments turned out to be duds.
Chiranjivi Chakraborty
first published: Aug 14, 2022 11:09 am
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