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Imagine a legendary investor, known for his calculated moves, suddenly placing a price on an industry that was riddled with failures. Today we will try to understand the last and perhaps the most daring move of Big Bull. And this is the biggest question. Isn't it ? Why would Big Bull, the king of the Indian stock market, put his entire reputation at stake?
That too in the airline industry which is considered a graveyard of big players. Look, to understand this bet, first we have to understand the field where this game was being played. Meaning the reality of the Indian aviation market. And this is no joke. Just think about Kingfisher Airlines. Even big names who had a sea of money drowned here.
This sector, sir, was not for the faint hearted. It simply ate cash and shattered dreams. And the difficulties were not limited to this. The sky was already dominated by two giants. Indigo and Air India Group. It wasn't just the competition. He was the strongman who controlled more than 83% of the market.
So, entering this market was not like starting a new business. It was like building your hut in the middle of a fight between two elephants. But despite all this, Rakesh Jhunjhunwala decided to challenge this seemingly impossible market. Yes, but let me make one thing clear, Rakesh Jhunjhunwala was not a gambler who was throwing dice with his eyes closed.
No, he was a chartered accountant. A strategist who always had his eye on the numbers behind the story. His every move was meticulous and his real secret weapon was his financial understanding. His journey started in 1985 as a CA. But his first big claims in Tata Tea brought him real recognition. When he tripled his money, he showed the world that he had an extraordinary ability to read the mood of the market.
So the question is how did they do it? See, his success was no fluke. It was based on some strict rules. A kind of playbook that guided his every investment decision. This was his playbook. Some rules he never compromised on. See, his aim was not just to find good companies but to find bulletproof companies.
He wanted revenue growth of more than 10% to show that the company was growing and returns of more than 15% to prove that it was efficient. And yes, the most important rule is promoter holding more than 50%. This means that the money of the people running the company is also at stake. And this number, over 15%, was perhaps the most important.
He was always looking for a return on capital employed or ROCE of more than 15%. Simply put, this meant that the company was earning a tremendous return on every rupee invested in its business. This was the biggest sign of a healthy and efficient company. This number was the second big pillar of his strategy.
Debt to equity ratio of less than 0.5. This simply meant that he would bet only on companies that were not burdened with debt. Why? Because companies with less debt are more stable and can easily weather any economic storm. Now this is fun. Like another great investor of the world, Warren Buffett, Jhunjhunwala also believed in the buy and hold strategy.
Meaning, in the power of patience, but this is where the paths of both of them completely separated. While Buffett shies away from debt, Jhunjhunwala had no qualms about multiplying his profits with leverage. So with this entire playbook in mind, we now come to his final move. A move that seemed to challenge every logic and every rule and yet it was a true test of his principles.
Aakash Air and Aakash took off, that too at rocket speed. Starting from Lucknow in December 2022, within a year, connecting major cities like Kolkata, the first international flight to Doha also started by March 2024. But it wasn't just about opening new routes. This was to win the trust of the passengers.
Passenger load factor, meaning how full the flights are, increased from 53% to 92% in just one year. It's not just numbers. This is proof that people have reposed faith in Akasa. How did Akasa differentiate herself from others? By focusing on the customer in a way that no one else had done. Bringing pets on the plane, providing safety manuals in Braille or eco-friendly uniforms.
All this was n't just for marketing. These were steps to build a fundamentally strong and differentiated business. Exactly the kind of company his investment philosophy always sought. And all of this brings us to the last and biggest question. What does this bold move mean for the Big Bull legacy? And that's a question analysts will probably debate forever.
Was Aakash Air the culmination of his lifelong investment acumen? Was this the ultimate test of whether his principles could conquer even the world's toughest markets? But perhaps to understand his legacy we need to look a little beyond the balance sheet. He himself believed, as he once quoted his father, that real wealth lies not in earning but in giving.
This philosophy was as much a part of his identity as his understanding of investing. So in the end, Akasa Air is not just an airline. This is a living case study of the principles of a legendary investor that have stood the test of time and continue to soar in the face of seemingly insurmountable odds.
And that is why this question still persists today. Will Rakesh Jhunjhunwala's playbook, based on decades of experience, make Aakash a lasting success in the challenging Indian skies ? Well, only time will answer this.
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