Rakesh Jhunjhunwala, the Indian billionaire investor who is admirably called ‘Warren Buffett of India’ because he set an exemplary example of how to create wealth from stock market passed away on 14 August in Mumbai.
As a qualified CA and son to an Income Tax officer, Jhunjhunwala had entered the stock market in 1985 when Sensex was at 150 points with just ₹5000. The journey which began with ₹5,000 and today he has left this world leaving $5.8 billion wealth (according to Forbes data) for his family.
He is no more with us but his investment principles would continue to motivate stock market investors to grow wealth from stock markets.
In an interview with Times Network India Economic Conclave 2021 held in March, Jhunjhunwala spoke about how investing through mutual fund or fund managers is a mature attitude to have.
When asked about his advice to the Robinhood investors which has taken a birth in the pandemic crisis and have come to stock markets believing that stock market is the place for instant gratification.
To this, Rakesh Jhunjhunwala said, “Firstly, I would like to tell them, don’t forget this is not a racecourse. And all this volume of fluctuation that comes in games cap which would come in America..I think it can be very damaging for investors. They are going to lose money in that.”
He further added, “If you get debt 6 percent return, your target should have get 15-24 percent on equity. ” He further adviced investors to not involve in any type of daily gambling. He said, “Don’t involve yourself in all this gambling where stocks go up by 40 and 50 percent everyday.”
The mature attitude is to invest safely, give your money to experience people to invest through mutual funds to fund managers and expect a return which is reasonable, he said.
“You know I use to have a drink at Geoffrey’s and some pretty girl came and asked me what do you buy and what returns you get. I tell her about the stocks and the returns will double in 3-4 years. The girls replied only,” he said. “I give her address of the Mahalaxmi racecourse.”
“Everything in life is about maturity and don’t go on scaling your bets,” he added.
Rakesh Jhunjhunwala ruled the Indian stock market for decades, making intelligent investment choices to build an empire of stock holdings worth over ₹40,000 crore. He was India’s 36th richest person.
His first big profit was seen at ₹0.5 million in 1986 when he bought 5,000 shares of Tata Tea at ₹43 and within 3 months it was trading at ₹143. He made a profit of over 3 times by selling the stocks of Tata Tea. Then there was no looking back.
He never gave up on his love for Tata companies and its stocks, he held 1 percent each in Tata Motors with shares worth 1,731 crore and Tata Communications valuing ₹336 crore.
Between the years 1986 and 1989, he made ₹20-25 lakhs from his investment at the dalal street.
As on June 2022, with a 17 percent stock holding, Rakesh Jhunjhunwala owned 100.7 million shares of Star Health and Allied Insurance Company, worth a whopping ₹7017 crore.
His other major stock holdings include ₹2255 crore in footwear brand Metro, ₹1285 crore in Crisil and ₹853 crore in Fortis.
The 62-year-old’s entry into the capital-intensive sector raised eyebrows earlier this year, with many pointing to the chequered history of billionaire-backed airlines in India as well as the daunting global economic outlook. Jhunjhunwala had invested $35 million for an estimated 40 percent stake in the new airline. “A lot of people question why I’ve started an airline. Rather than answer them, I say, I’m prepared for failure,” the billionaire had said.
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