Investment maestro Rakesh Jhunjhunwala ’s ability to pick multi-bagger stocks needs no elaboration, as in 2017 alone, many of his top bets have more than doubled investor wealth. These include his favourite scrip Titan Company returning 161%, Delta Corp Ltd shares which returned 170%, shares of Dewan Housing Finance which surged by 142% and shares of Escorts Ltd which zoomed 158%. What sets the man apart from other investors in the stock market? In his own words–ability to take risk. “One thing which keeps me apart is that I have got guts. I may have Rs 1,000 in my bank but if I think the deal is worth a crore – I will do it. I have guts and setbacks don’t put me off. I feel them for 10 minutes but then I am ready to fight back,” Rakesh Jhunjhunwala explained in a recent interview with CNBC TV18. We take a look at the what the big bull of Dalal Street is betting on, of late.
Star Health & Allied Insurance
Rakesh Jhunjhunwala has reportedly bid for Star Health & Allied Insurance, the first stand-alone health insurance company. According to a report in the Times of India, Star Health & Allied Insurance carries a price tag of $1 billion. Interestingly, the company has also received bids from Azim Premji-led PremjiInvest, besides six other companies who are eyeing the insurer. The newspaper reported that bids were received from Kedaara Capital, WestBridge, Temasek and Prudential and strategic investors including ICICI Lombard and HDFC General Insurance. The management headed by V Jagannathan, former CMD of United India, has driven the company to be one of the profitable insurers in the health space. Besides, with a slew of insurance companies getting into the public float mode, shareholders feel the timing is perfect for a sale, said the report.
Earlier last week, Rakesh Jhunjhunwala had reportedly teamed up with billionaire investor Radhakrishnan Damani to bid for Binani Cement, a company which is facing bankruptcy proceedings from its lenders. “The partnership between Jhunjhunwala and Damani is a big surprise,” the Economic Times had reported a source as saying. Interestingly, in a recent article interview featured in Firstpost, Rakesh Jhunjhunwala had revealed that the D-mart founder Radhakrishnan Damani has made a lasting impact in his life. Notably, lenders had reportedly made a claim of Rs 3,884 crore on the company. This includes loans acquired by Edelweiss Asset Reconstruction Company from banks and dues to State Bank of India, Canara Bank and Bank of Baroda. This apart, the company also faces claims of Rs 2,429 crore from IDBI Bank and SBI in the form of corporate guarantees.
In December-17, ace investor Rakesh Jhunjhunwala had picked up equity stake worth Rs 180 crore in Mumbai-based gaming startup Nazara Technologies. Frequently referred to as India’s Warren Buffett, Rakesh Jhunjhunwala had earlier stayed away from the e-commerce and digital space in India, citing concerns over valuations, business models and a lack of cash flows. “Most of the big companies globally have been built from the profit of cash flow and not investors’ money. I would like to see online companies with a profitable model and there isn’t any. I will believe in it when they sell at an economic price,” Rakesh Jhunjhunwala had pointed out in Retail Leadership Summit last year.
So what’s making him bullish on Nazara? “I am always on the lookout for promising companies which are leaders in high growth verticals. Nazara is a leading company in the mobile games business. Nazara has a consistent track record of delivering profits, cash flows, along with efficient use of capital and high ROE. I see a growth potential in the company,” Rakesh Jhunjhunwala said.