Dalal Street had been fraught with risk. People who made big fortunes often made headlines as scamsters, leading to equity markets being looked at with suspicion in post-liberalised India.
Rakesh Jhunjhunwala, a partner at RARE Enterprises, who rose to amass a USD 5.8 billion fortune and earn the tag of India’s biggest individual investor, was broadly an exception to this, who leaves behind a relatively cleaner slate.
Unlike names like Harshad Mehta and Ketan Parekh, whose rise in fortunes was tainted with scam links, the newest ‘Big Bull’ in the more-regulated market had lesser baggage on this front.
Frequently likened to legendary investor Warren Buffett, Jhunjhunwala was unabashed about wealth creation and strutted his connections flamboyantly, a sign of the shift to a market-based economy in early 1990s taking root.
While he did not make big headlines for scams, Jhunjhunwala did feature in some cases of insider trading and was also speculated to front-run on stock trades ahead of big news events. In 2021, he and others settled an insider trading case related to Aptech by agreeing to pay Rs 37 crore under the consent route, where an individual can close a pending matter without admitting or denying the charges.
A Rs 70-crore gain on an investment in Zee Enterprises in a short time, by investing in the stock days ahead of its board deciding on a merger with rival Sony Pictures Networks in 2021, had also led to chatter around his conduct.
However, it was Jhunjhunwala’s long-term, research-based bets on stocks like Titan and Indian Hotels Company which made him one of the biggest names in the Indian markets.
Every move in his portfolio was tracked closely by the growing number of investors in India, who wanted an early entry into scrips which would eventually break out.
Some of the bets, especially in the infrastructure space, did not pay off for Jhunjhunwala. But the proverbial ‘humbling effect’ was missing, as he would often succeed in some other stock, showcasing his Midas touch.
People in the know say behind the value creation was an operation of deep research carried out by him and analysts at the Nariman Point office of RARE Enterprises (which is named after the first two letters in the name of Rakesh and his wife Rekha).
And when companies underperformed, Jhunjhunwala was unsparing, like the iconic character of Gordon Gekko in the movie ‘Wall Street’. Managements of quite a few portfolio companies faced questions from an irate Jhunjhunwala himself on analyst calls. The management of Titan, which has been a two-decade old investment for Jhunjhunwala, was at the receiving end of one such tough public questioning in 2020.
Outspokenness and wit came to define Jhunjhunwala. Unlike …….