The life journey of Rakesh Jhunjhunwala is an excellent example of the power of passion, perseverance, and foresight. Born on July 5, 1960, at a time when India grappled with restrictive socialist policies, little did anyone know that a young man from Mumbai would one day become one of India’s wealthiest and most influential investors. His father’s modest profession as an Income Tax officer seemed an unlikely springboard for a stock market tycoon.
However, it was precisely his father’s dabbling in stocks that planted the seed of interest in the young mind of Rakesh Jhunjhunwala.
The Inspiring Chapters present the remarkable story of Rakesh Jhunjhunwala, the ‘Big Bull’ of India’s stock market, whose journey from a young commerce student to a multi-billionaire investor was an epitome of passion and foresight. Join us as we delve into the life of this legendary figure who shaped India’s growth story and left an indelible mark on the investing world.
Early Lessons for Rakesh Jhunjhunwala
Enrolling at Sydenham College to study commerce, Jhunjhunwala’s early introduction to the stock market came through conversations with his father’s friends. Fascinated by the dynamics of stocks, he sought his father’s counsel, who advised him to read newspapers diligently, as news was the key driver of stock market fluctuations.
Despite encouragement, his father refused to fund his stock market pursuits or let him borrow from friends. Undeterred, the determined Rakesh Jhunjhunwala decided to foray into the stock market investment with the little capital he got from his father’s clients, assuring them of better returns than fixed deposits.
Embarking on the Stock Market Journey
Armed with an initial capital of just Rs. 5,000 and a freshly minted degree from the Institute of Chartered Accountants of India, Jhunjhunwala took the plunge into Dalal Street in 1985. Luck favoured the bold, and he tasted early success with a significant win on Tata Tea, which catapulted his confidence. This was the first big profit that Rakesh Jhunjhunwala made from the 5000 shares of Tata Tea that he bought at Rs. 43 in the year 1986. In 3 months, the stock price of Tata Tea rose to Rs. 143 and he tripled his money. In the next 3 years, Jhunjhunwala made around Rs. 20 – 25 lakhs by investing smartly in the stock market. He didn’t look back after that.
In the late 1980s, he achieved significant success by making a leveraged bet on the iron ore exporter Sesa Goa, reaping substantial returns. Buying the stock at 25-26 rupees and selling it in tranches as it soared to 2,200 rupees, he demonstrated his ability to capitalize on well-timed opportunities. His timely investment in Praj Industries also helped him in making a good amount of money.
SourceDuring the same period, Jhunjhunwala’s investment in Tata Power also paid off handsomely, strengthening his affinity for Tata group stocks.
Smartly Investing in Stocks Post India’s Liberalization
The real investment prowess of Rakesh Jhunjhunwala, however, came to the fore when India’s economy underwent liberalization in 1991. As India’s growth story began to unfold, he proved to be an early visionary investor, betting big on companies like CRISIL, Aurobindo Pharma, and NCC. His exceptional foresight and astute decision-making earned him the reputation of a stock market virtuoso.
In 2002, Jhunjhunwala made his initial investment in Tata’s Titan Company, which eventually became his most profitable holding. Over time, he further diversified his portfolio within the Tata group, investing in companies like Tata Motors, Indian Hotels Company, and Tata Communications.
SourceBeyond the Tata group, Jhunjhunwala exhibited his investment acumen by multiplying his wealth in stocks such as Lupin and CRISIL. His strategic choices and steadfast approach to holding onto long-term investments allowed him to accumulate substantial wealth.
Rakesh Jhunjhunwala – The Risk Taker
Even as Jhunjhunwala thrived in the listed stock market, he wasn’t averse to taking bigger risks in private market investments. His ventures into private equity investments reaped significant windfalls when three of his portfolio companies – Nazara Technologies, Metro Brands, and Star Health and Allied Insurance – went public.
An analysis by Business Standard revealed that 76% of the value of Jhunjhunwala’s disclosed portfolio emerged in the seven years after he turned 55, with the biggest gains recorded between 2020 and 2022. His portfolio value surged from 8,431 crore rupees in March 2020 to an impressive 46,000 crore rupees in August 2022!
Beyond Investment in Stocks: A Multifaceted Philanthropist
While Jhunjhunwala’s expertise lay in the investment in the stock market, his philanthropic endeavours mirrored his larger-than-life personality. As his wealth grew, so did his commitment to giving back to society. Pledging 25% of his wealth to charity, he embarked on several impactful projects, including building an eye hospital in Navi Mumbai to conduct 15,000 free eye surgeries annually. He also contributed generously to shelters for cancer-affected children, Ashoka University, Friends of Tribals Society, and Olympic Gold Quest, empowering Indian athletes to excel on the global stage.
What set Rakesh Jhunjhunwala apart from the rest was his candid and upfront demeanour. His interviews and television appearances were eagerly awaited by investors and the public alike, as he fearlessly shared his investing philosophy and unyielding belief in India’s economic growth. His predictions about India’s emergence as the world’s fastest-growing economy came to fruition, further cementing his reputation as a visionary investor.
A Futuristic Vision of Rakesh Jhunjhunwala: Akasa Air
In a stunning display of boldness and innovation, Jhunjhunwala started a low-cost airline named Akasa Air. Despite India’s history of airline failures, he put his personal wealth on the line to launch this ambitious venture. A week before his untimely death, Akasa Air embarked on its inaugural flight, marking the realization of Jhunjhunwala’s aviation dream.
While Rakesh Jhunjhunwala may no longer be with us, his impact on Dalal Street, his humour, and his unmatched investing wisdom will continue to illuminate India’s horizons for years to come. His legacy as one of India’s most celebrated investors will forever inspire the nation’s investing community.
