Rakesh Jhunjhunwala – The Journey from Rs. 5K to Rs. 20000 cr

Rakesh Jhunjhunwala

Rakesh Jhunjhunwala, the name that requires no introduction. The mythical investor who is recognized as the Warren Buffett of India. Let us check out the accomplishment story of Rakesh Jhunjhunwala and his voyage from Rs. 5,000 to Rs. 20,000 crores.

Rakesh Jhunjhunwala was born on 5th July 1960. His dad was an Income tax executive and was fascinated by stocks as well as used to discuss the stock market by his friends. Rakesh moving around with his father often as a kid would listen to them. Once he inquired his father why these stocks’ value fluctuate so frequently. He told him to check the news and said that the stock creates the price to vary. This was his first lesson of the stock market. He got captivated by shares as well as found it interesting. He started to get into the stock marketplace along with his father. He told him to do whatsoever he wanted in life however at least get professionally competent. Rakesh then took up chartered accountancy as well as completed his CA in 1985.

Rakesh Jhunjhunwala’s Initial Journey

After finishing the CA, Rakesh Jhunjhunwala said his father and expressed his desire to get into the stock market. His father responded by telling not to ask him or any of his friends for cash. Earn and trade with your money. He started his career in 1985 while the BSE Sensex was at 150. He prepared his first significant revenue of Rs 0.5 million in 1986 while he sold 5,000 shares of Tata Tea at a price of Rs 143 which he had bought for Rs 43 a share 3 months before. Between 1986 as well as 1989, he earned Rs 20–2.5 million. His first primary successful wager was iron mining firm, named Sesa Goa (today Vedanta). He credited 400,000 shares of Sesa Goa via onward trading, worth Rs 10 million as well as sold about 2-250,000 shares by Rs 60–65 and additional 100,000 at Rs 150–175. The value rose to Rs 2200/- as well as he sold some shares.

Rakesh Jhunjhunwala credited 6 crore shares of Titan in 2002-03 at a regular price of about Rs 3. The stock is now trading at Rs 390 level as well as his investment worth is nowadays 2100 crore, which made about 35 lakh per hour for him.  In 2006 he credited Lupin about Rs 150 which is nowadays trading at 1100 levels.  Likewise, there are several stocks in his portfolio and best decision he took at the right time that enabled him to earn huge money.

“Jhunjhunwala ponders Radhakishan Damani as his guru.”

Jhunjhunwala’s portfolio of shares is tracked consistently. His newest stock portfolio is the topic of several debates and study. Like Warren Buffett, he is an extended period investor. However, he admits that ‘trading’ income aided him to build his wealth base and remains.

Jhunjhunwala is the chairman of Aptech Limited plus Hungama Digital Media Entertainment Pvt. Ltd. as well as sits on the board of managers of numerous Indian firms such as Prime Focus Limited, Geojit BNP Paribas Fiscal Services Limited, Praj Industries Limited, Bilcare Limited, Concord Biotech Limited, Provogue India Limited, Innovasynth Technologies (I) Limited, Nagarjuna Construction Company Limited, Mid-Day Multimedia Limited, Viceroy Hotels Limited as well as Tops Security Limited.

Jhunjhunwala’s stocks fell by up to 30% in December 2011. He recuperated his losses in February 2012.  In May 2012 he augmented his stake in Aptech by 2.24% nowadays holds 12.7%

Jhunjhunwala capitalized $4.6 Million in A2Z Maintenance increasing his stake in the firm by 3.57%, taking his stake in the firm to 23.2 percent.

Rakesh Jhunjhunwala’s Philosophy 

Rakesh Jhunjhunwala believes in the power of faults. He says it is the mistakes that made him learn as well as become a better investor.  He says. “If you do not admit that it is your mistake, you would never learn.  To prosper in the stock market, one just doesn’t require to have the aptitude to learn from one’s errors, but one has to take responsibility for taking his or her own decision. “He even added, “I don’t blame the promoters of firms. I blame myself. The promoter is whatever he is. I have to recognize that. He is not whatever I expect him to be.”  Jhunjhunwala says whatever he has learned in life is to try and earn cash in trading as well as to invest it in stocks.

His stock picking approach is influenced by George Soros’ trading policies and Marc Faber’s analysis of financial history. He approves the rule, “the style is your friend.” In fact, Jhunjhunwala’s stock philosophy says “Buy right as well as hold tight.” He has said that the marketplaces are temples of entrepreneurship and thinks that they are the ultimate arbiters. Some of the most important lessons on the stock market that Jhunjhunwala has learned, which may help investors to stop failing in the stock markets, are:

  • Expect trend and try to gain maximum benefit from it. Traders can only be considered smart when he or she goes against human nature.

There are incidences when traders or investors just try to follow the herd approach and just buy the stocks in which rest other people are buying. This is not at all a good exercise as the principal motive of any kind of investment differ from one person to person, and therefore always ask yourself why you need to buy a particular stock.

  • Always be sharp in your thoughts and try to invest in a business, never in a company.

What a funny world it is, he said, the most prominent blunder committed by young investors is that they generally do the opposite. In simple words, if the stock of a specific company enthuses them, then they just buy it without giving any second thought about the details of the business. It is essential for investors to study the nature of the business conducted by the company.

  • Never make your investment on an emotional background as the probability increases to face a loss in stock markets.

Never be too optimistic about a particular company on the emotional front just for few baseless reasons. In fact, how often you might have heard an investor saying: “this was my brother’s most favorite company,” or “ I just love to invest in this company,” or similar other such idiotic reasons. If you are in business, always fall in love with the industry which has got a definite potential to grow and further help you develop your money. Always burry down your emotional quotient and try to continue as a rational person.

Rakesh Jhunjhunwala says, “Stock Market is all about money, but it is also about acquiring a right and good knowledge. Also, this market is also about egos or satisfaction of having been proved right. In fact, it feels great when that right comes from original thought and not just from a directed source.” He suggests performing adequate research, gather your data and knowledge before making any investment in stock market. He also says, “For me, research is 40 percent data, 20 percent analysis, 40 percent instinct.”

Rakesh Jhunjhunwala’s belief in India’s Growth story

Jhunjhunwala claims that the Indian economy would grow by 9-10 percent. Jhunjhunwala’s theory is that Indians would save $1 trillion a year, as well as even if 10 percent of that cash—$100 billion —streams into the markets, there would be a tsunami on the bourses. “Thus, I remain strong about the belief that, for the following 20 years, we could see a bull run similarly the one Wall Street had from 1987.”

Jhunjhunwala is an inspiring character who never walked down to shortcuts to achievement and always trusted upon the knowledge willingly available in the marketplace. He has immense trust and faith in the Indian market. He said in a talk, “I don’t think India is a poor state. We are very rich in philosophy, food, resources, as well as also in our movie industry.”

Rakesh Jhunjhunwala guru mantra to be successful in the stock market is as enumerated below:

  • Advises the person to become fascinated by a stock. As per him, “PURCHASE RIGHT & HOLD TIGHT for years to come.” He has few shares for last 10 years in addition to he is still minting cash from those stocks.
  • Recommends that one must not follow big investors blindly as their jeopardy profile and opt for the long-term objectives with time frame might be hard to be followed by the retail
  • The market is best, and everything is reflected in the value, and thus there is no point in fighting the trend as the marketplace is always right.
  • One should be able to generate a balance between the fear and greed.
  • According to him, one has to learn the stock market trading as no one could make you discover the market as one has to gain the experience by remaining in the stock marketplace.

Thus, by following Rakesh Jhunjhunwala’s guidance in the stock market to be patient is worth to understand and implement as you can grow big like Warren Buffet.

Rakesh Jhunjhunwala’s thoughts about philanthropy

His knowledge, as well as the philosophy of investment, has given his shareholders huge profits. However, inclined by American billionaires like John D Rockefeller, Jhunjhunwala also expressed his pleasure and respect towards the passion of Melinda Gates and Azim Premji in domains like philanthropy. The two principal causes—education and nutrition—are the crucial outlines as he has expressed his desire to set up a top-class institution of learning in the next 10 years, where he plans to put in over Rs 1,000 crore.

Vikas Agarwal
the authorVikas Agarwal
Vikas Agarwal is an IIT-Varanasi graduate in Chemical Engineering. He is the Founder and CEO of Finaacle.com - an investment advisory website. He is a Business Development Professional but a Value Investor at heart. He writes articles on Finaacle, which focus on simplifying the art of investing and the causes of human misjudgment when it comes to investing. He also shares his experiences as an investor and lessons from some of the greatest investors of all time.


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