He is the quintessential optimist who has straddled the divide between greed and fear with aplomb. The incorrigible bull who has made his millions decoding the arcane movements of the Indian equities. Often referred to as India?s Warren Buffett, he is the first dollar billionaire from India to have made his fortune primarily from the stock markets. That?s Rakesh Jhunjhunwala for you ? the biggest Indian bull alive.
And it?s not for nothing that he has earned this enviable reputation. His official portfolio ? which combines his holdings with that of his wife ? is itself today worth over Rs 3,400 crore. This list only showcases his holdings that exceed 1% in a company. His actual holdings are believed to be much greater, as there could be investments in listed large-cap stocks in which holdings are less than 1% yet significant in value terms. Then, investments in unlisted companies couldn?t be ruled out. Some market mavens peg his personal net worth at around Rs 10,000 crore.
That?s no small change. Especially considering that Forbes this year ranked him 51 among the richest Indians with an estimated wealth of $1 billion. That?s about Rs 4,600 crore, nearly half his actual worth, if the experts are to be believed. There are not many individual investors, at least not in the public domain, who have matched this ability to create wealth.
Unsurprisingly, his stock-picking strategies and his methods of zeroing in on those elusive multi-baggers have always been a talking point among the investment fraternity. Many, in fact, have made it a habit of tracking his portfolio holdings religiously.
His current holdings (that is, where he has more than 1% holdings) are spread across as many as 27 stocks, mostly mid-caps, and across sectors such as oil exploration, IT, hotels, pharma, entertainment, engineering, construction, retail and auto ancillaries. His investment in Titan Industries alone is worth over Rs 1,000 crore.
During the June quarter, he increased his holding in VIP Industries to 5.81% from 4.47% as compared to the previous quarter, according to CapitalLinePlus data. In the same period, he reduced his stake in Titan Industries to 8.58% from 8.62% and in Praj Industries to 7.73% from 7.83%.
Interestingly, there are hardly any cyclical or commodity stocks in his portfolio.
Jhunjhunwala prefers investing in a large amount in a small number of companies ? which is against the usual investment style of diversifying across stocks. In fact, his top 5 picks ? investments in companies such as Titan Industries, Lupin, Crisil, Nagarjuna Construction and Karur Vysya Bank ? account for about 60% of his portfolio.
Going by his sizeable investments, you?d expect Jhunjhunwala to develop some kind of emotional attachment to the scrips he invests in. But that?s not him. ?I hold on to a stock because it will give me returns and not because I?m emotionally attached to it,? insists Jhunjhunwala, who manages his own portfolio as a partner in his asset management firm, Rare Enterprises. And for all the intrigue and attention surrounding his trading activities, his investment philosophy remains simple: ?buy right and hold tight?. Jhunjhunwala admits to being a long-term investor, but clarifies that he?s not an inveterate bull: ?I have been a bear many times, including in 1992 when the market (Sensex) fell from 4,300 to 2,100 levels. Incidentally, this was the time Harshad Mehta, India?s first bull, was at the helm of market affairs.
Like many big investors, he too made mistakes which he is candid about. ?I was cautious and went short sometimes in the period between October 2007 and October 2008.? In fact, he regrets not having sold as much as he should have in October 2007.
That said, Jhunjhunwala is very much bullish on the India growth story at the moment. Recently, in an interview to a news channel, he reiterated that the market will touch new highs by the end of this financial year. ?He has an unshakable conviction in the India story. That?s his greatness,? says Shankar Sharma, vice chairman & joint MD of First Global, who has locked horns with Jhunjhunwala on several forums and panel discussions.
At 50, he may hold on to his convictions a little more tightly but that doesn?t mean Jhunjhunwala frowns upon new ideas. ?I read a lot and am constantly learning from others,? he reveals. The walls of his office in Nariman Point ? dotted with line drawings of legendary investors such as Warren Buffett, George Soros, John Templeton and Peter Lynch ? in a way bears testimony to that. And though he has no role models as such, he admits to admiring George Soros because of the ?kind of success he has achieved, his understanding of the markets and his charitable activities.?
His investment style may bear some semblance to that of these gurus but a lot of top stock traders believe he is simply incomparable. ?He is not a copy of anybody. He is Rakesh Jhunjhunwala,? says Raamdeo Agrawal, co-founder and joint managing director at Motilal Oswal Financial Services. ?He is intelligent, passionate and an independent thinker. Besides, he has the ability to take measured risks and leverage his portfolio, something very few investors can do successfully.?
According to Parag Parikh, founder and chairman of PPFAS, an investment advisory firm, Jhunjhunwala differs from Buffett in some ways: ?For example, unlike Buffett, he has made some money from trading and does track market movements actively.? That said, as someone who has been an early bird in identifying good businesses like Crisil and Titan, Parikh says Jhunjhunwala?s investment acumen is top-notch. And unlike his contemporary Harshad Mehta, Parikh says Jhunjhunwala is ?Mr Clean who pays all his taxes.?
But more than paying taxes, perhaps it?s Jhunjhunwala?s charitable activities that might endear him to many. Like Buffett and Soros, he plans to get more involved in philanthropy. ?I believe that wealth is a gift from God and has to be used for the good of society. I hope to expand my charitable activities substantially in the next few years,? he says, without revealing a definite time-frame or the exact amount he intends to spend.