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Greetings. Today we are talking about a name which you can say has become the second name of the Indian stock market. Of Rakesh Jhunjhunwala. Rakesh Jhunjhunwala. Yes. Whom people often called Big Bull. The information we have shows his journey quite closely. Meaning how he started with just ₹5000 and when he passed away on 14 August 2022.
Yes. By then, he had built an entire empire worth around Rs 45,000 crore i.e. 5.8 billion dollars. Yes. And it's not just about money. I think this is a story of courage, absolutely about taking risks. And every art of understanding the pulse of the market. We learn from our mistakes and create our own investment philosophy and then stick to it.
So today we will try to understand what was actually behind this huge success and what can today's investors learn from it? Absolutely, let's start this interesting story. Rakesh ji was born in Hyderabad. Yes. Radheshyam ji's father was an Income Tax Officer. Actually, our family was from Jhunjhunu, Rajasthan.
Marwari family. Good. That's why the surname is Jhunjhunwala. Yes, Jhunjhunwala came from there. And since father was there at home, we used to talk about the stock market and it is said that Rakesh ji's interest grew from there. He probably started reading those stock news from the age of 15. But the path was not easy as you said.
When he told his father that brother, I want to go into the stock market. Yes. So first I got scolded. I was told to complete my studies first. He graduated from Sydenham College, Mumbai. Then he also became a CA. Chartered Accountant. Yes. Yes. And father had clearly said that look, you will not get a single penny from home for investment and never enter the market by borrowing from friends or relatives.
This was very important advice. Very important. And his mother even used to say jokingly, brother, who would marry a stock market person ? Yes, this was probably the thinking of that era. It was absolutely the middle class thinking that this is speculation. That's correct. Well, he did not give up. In 1985, at the age of 25, I started with my savings of ₹5000, just ₹5000, and the method of raising money was also very interesting.
Some investors might have got 12-13% on their FDs at that time. Yes, almost that much. He promised 18% returns and collected around ₹5 lakh. Good. Then, with the help of his elder brother, he got some more clients and in total, he raised an initial capital of around ₹5 lakh. It's amazing, I mean it was a jugaad.
The most amazing thing is that his first big bet paid off instantly. Yes, that Tata Tea one, it had been only a year since it came into the market in 1986. Bought 5000 shares of Tata T at ₹43. At ₹ 43 and in just 3 months that share became ₹143. More than three times? Yes. Meaning a direct profit of ₹5 lakh from a single trade.
Yes. Where would your confidence have reached with this? Obviously it will be much bigger. And it is said that between 1986 and 89 he had earned around Rs 20-25 lakh. Imagine starting from Rs 5000 and reaching Rs 20-25 lakh in a few years and the first income tax return is said to have been filed for Rs 5 lakh.
Wow, during this time he met Radhakrishnan Damani ji on Dalal Street. Yes, the ones with the damar. Yes. Today we know him for DMart. Rakesh ji considered him his mentor. Damani ji's father was also in the stock market. After his death, he also came into the market and it is said that the pair of these two was very powerful.
How? Rakesh ji is a talker and Damani ji is a listener and has a calm nature. Damani taught him many tricks of the market and between 85 and 89, both of them together made a lot of money in trading. Hmm. Then came 1989, yes. And that famous story of Sesa Goa. Yes. Sassa Goa which is today part of Vedanta.
What happened at that time was that industry was growing in India. There was demand for iron ore but there was some slowdown in the global market. Yes, there was an impact of recession. So Sesa Goa was incurring huge losses. The stock had fallen to ₹28. Everyone was selling. And this is where Rakesh ji's style came to the fore.
Contrarian betting means buying when everyone else is selling out of fear. Walk away from the crowd. Absolutely. He saw this as a big opportunity and invested around ₹1 crore to buy 4 lakh shares of Sesa Goa. 1 crore was a huge amount at that time. The big and interesting thing is that out of this, ₹50 lakh was his entire earnings till then.
And he had borrowed the remaining ₹50 lakh. Oh my god. This was a huge risk. Yes. That's why he used to say that if there is risk then there is love. Perhaps this phrase came from here. It could be, and his risky decision proved to be absolutely right. Sesa Goa has given tremendous returns in a short span of time.
How much? It is said that in 1989 itself his net worth had increased from ₹2 to ₹5 crores. Wonderful. It wasn't just luck. This was a testament to his analysis and courage. Absolutely. Well, after this he and Damani ji joined Manu Manik's group. Manu Manik was considered the leader of the beer cartel at that time.
Yes absolutely. Bear cartel means those people who make money when the market falls. Through short selling. Short selling, yes, means sell first and buy later, if the price falls then the profit is fine, so these were the people of the beer cartel and they had to deal with Harshad Mehta. o Harshad Mehta Big Bull before him.
Yes. Harshad Mehta launched such a bull run in the market that Manu Manik and his cartel suffered huge losses. So in the beginning, Jhunjhunwala and Damani might also have suffered losses in short selling. Yes absolutely. Because Harshad Mehta was not allowing the market to fall. But then in 1992 that Harshad Mehta scam came to light.
Yes, it is said to be a scam of around Rs 30,000 crore. The entire market was shaken. Was badly shaken. And Rakesh Jhunjhunwala took full advantage of this opportunity of this fall. How? He indulged in heavy short selling during the market crash and reports suggest that he earned Rs 30 to 35 crores in a short span of time.
Wow. But here an interesting twist also comes in the story. Yes, this is a very important turning point. This was a turning point in his career not just because he made a lot of money. So then, rather because after this, Rakesh ji largely distanced himself from stock trading and especially short selling.
Good. Why? He probably realised that incidents like the Harshad Mehta scam could definitely take the market down for some time. But the Indian economy and the Indian stock market are going to grow rapidly in the long run and no bear cartel can stop it. This was a tremendously meaningful vision. Absolutely, and his assessment proved to be 100% correct.
You see, in the 1990s the Sensex was around 1000 points. Today it is above 74,000. That's correct. So from here his focus shifted to long term investing. And perhaps he institutionalised this thinking in 1992. Yes absolutely. He started a company named Rare Enterprises Private Limited along with his wife Rekha ji, whom he married in 1987.
Rare RA Rakesh plus Rekha, yes absolutely, it was his own private investment firm which managed his stock portfolio and from here his journey turned from trading to long term investing, there is a funny story related to this which Rakesh ji himself had narrated, the one about AC, yes yes, that AC thing, tell me, his wife Rekha ji, as you told, was from a rich family, when she came to Rakesh ji's house after marriage, there was no AC there, well she often used to say that get an AC installed.
This is about 1990. VP Singh was the Prime Minister. The Union Budget was about to come and there was fear in the market that the government might take some action against business. Yes, there was fear of an anti-business budget. The market was falling. But Rakesh ji believed that VP Singh himself comes from a business family.
He will not bring such a budget which will cause loss to business. He then took a contrarian view. Yes. He bought heavily in the falling market. And on the day of the budget, it is said that the market opened at 6:00 am. Closed at 9:00. And within this time his net worth increased from ₹3 crore to ₹20 crore.
In just 3 hours. Yes. And that very night Rakesh ji came home with a new AC for his wife. He used to say that this story was not because he did not have money for AC earlier. Rather, to teach that whenever you have to buy something big, do not withdraw money from your savings. Invest your savings wisely and fulfill your hobbies with the profits from that investment.
This is a great example of long term wealth creation and a great lesson too. Absolutely, and perhaps the biggest example of this long-term thinking is his investment in Titan. Yes, the story of Titan is a classic. This was around 2003. He bought crores of shares of Titan. The price was around ₹3 per share.
Just ₹3? Yes. Within a short time the share reached ₹80. Huge profit. But then again, luck took a turn. The stock fell back to ₹3. Oh, I mean, whatever I earned, it all went to paper. Yes, imaginary loss of crores. Now what do most people do here? Would you have panicked and sold it? Absolutely. But Rakesh ji did not sell the shares.
That is his famous quote. When it is raining. The Best Thing You Can Do Is To Let It Rain. Meaning, when you are going through bad days, wait peacefully for them to pass. Yes, he had full faith in the fundamentals of Titan, its business model and the management of Tata Group. It wasn't just patience.
This was conviction. And what was the result? The result was that Rakesh ji never sold Titan shares in his life. Really? Yes, even today his family owns 5.1% shares of Titan. And the share which he bought for ₹3, today its price is more than ₹650. ₹3 to ₹6500? Yes. This is the definition of a multibagger.
This is value investing. Identifying a good company at the right value and then staying in it for the long term. This earned him the title of Warren Buffett of India. And there were many companies besides Titan. Yes. He earned multiple returns by investing in companies like Lapen, Chrysal, Pararaj Industries, Star Health and many more.
But it is not that he has never made any mistake. The aim must have been right every time. No, not at all, this does not happen in the stock market. He has also made many big mistakes in his career from which we should also learn. For example, perhaps the name of Dewan Housing and Finance Limited i.e.
DHFL comes in his biggest miscalculation. Yes, the DHFL case was much discussed. In 2013, he invested around Rs 70 crore in this company. But by 2019, DHFL defaulted on many loans and faced many other problems. And the share price fell by 97%. This was a big shock. 97% Oh my God, any other example? Yes.
Similarly, in 2012 he invested in another real estate firm DB Realty. That company also could not withstand the Covid pandemic and investors suffered huge losses. Perhaps some of his bets in real estate went wrong. Yes, it seems so. Another example is Mandana Retail. It was the parent company of Salman Khan's clothing brand Being Human.
Well, a company with being human? Yes, yes. He had bought 12.60% stake in it at the price of ₹217 per share. It was a huge investment. But by 2021, the share price fell to ₹16 and he had to exit with a huge loss. This example is also important for us. is a must. This shows that no one is infallible in the stock market.
Even the most experienced, most successful investors can make mistakes. What's important is that overall most of your strategies are correct. Absolutely. And you learn from your mistakes. Rakesh ji's success far outweighed his mistakes. You are right. Well, towards the end of his career, he ventured into a completely different sector.
Yes, Akasa Air. Akasa Air. In December 2021, they started this low cost airline service. This was a huge bet. Yes, it was a big surprise for many people, especially in a difficult sector like aviation. Perhaps he was looking at the boom in the Indian airlines sector. Were looking at the growing middle class.
Akasa Air will fly its first commercial flight on August 7, 2022. Yes and it is a sad coincidence that this happened just a week before Rakesh ji's death. Absolutely. Unfortunately, he was not around to see this new venture progress much further. On the morning of 14th August 2022, Rakesh ji said goodbye to this world due to kidney related problems and multiple organ failure.
Starting from ₹5000 to ₹45,000 crore, Rakesh Jhunjhunwala will always be remembered as the Big Bull of the Indian stock market. So what is the essence of this extraordinary journey of Rakesh Jhunjhunwala? To me, this is a story about the courage to dream big. Yes. The ability to take calculated risks, the humility to learn from his mistakes and perhaps most importantly, an unwavering faith in India's growth story.
Exactly what his investment philosophy was, was to identify good companies based on their fundamentals , believe in them and then patiently stay in them for the long term. It is equally relevant even today. His story is not just about numbers and profits. It is also a story of conviction, patience and a deep understanding of the market.
He proved that with the right strategy , discipline and long-term outlook, the stock market can indeed be a powerful tool for wealth creation. Absolutely. Before leaving, he leaves a thought for the listeners. Yes definitely. Rakesh Jhunjhunwala, seeing the future potential, invested in companies like Titan when it was perhaps not that popular.
Given today's changing global and Indian economic landscape, which sectors or companies have the potential to become the titans or the next big bulls of the next decade? This is something we should think about. You have left a good question. Think about this. Thank you very much for this insightful and informative discussion. Thank you.
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