This is a story of “Rakesh Jhunjhunwala” and how he turned a near ₹5000 rupees into a massive ₹20,000 crores!!!
Rakesh Jhunjhunwala is arguably the king of the Indian Stock Market. His success has inspired millions of Indians to participates in the Indian Stock Market and how his story is a case study in almost every business school. And why not is one of the richest men in India 2020? What makes is a more impressive fact that “Mr. Rakesh Jhunjhunwala” was not born in a rich family like that of Tata’s, Birla’s, or Ambani’s.
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He is a self-made billionaire, some of them called Big Bull or Warren Buffet of India. So what makes is man special and more importantly what is you and I can learn from his success story. For that lets starts from the beginning of his childhood.
Rakesh Jhunjhunwala was born in 1965 in a middle-class family. His father was an income tax officers and his mother was a housewife. His father was interested in stocks but he was not an active trader. When Rakesh was a young child he would listen to his father and his friends discussing the stock market. And he would listen to them very carefully.
One day out of curiosity he asked his father a very simple question. Why do the stock prices fluctuate on a daily basis? So insisted on giving any complex explanations. His father told him in a simple way why he didn’t check or read the newspaper. If there is any news about the companies the stock prices will fluctuate the next stay and that exactly what happened.
So in this way, the young “Rakesh Jhunjhunwala” fascinated with the stock market and he learned a lot from his father’s detailed explanations. His father new the Rakesh was destined to go the stock market. But he advised that do whatever you want to do in life but at least get professionally qualified.
So “Rakesh Jhunjhunwala” completed his graduation from Mumbai Sidney college, took up charted accountancy, and become a Charted Accountant in 1985. After finishing his studies Rakesh told his father he wanted to do the stock market. His father knew that is gonna happen so even though he encouraged Rakesh to perceive his dream but just kept one condition, Don’t Ask Money From Me And My Friends.
I think it takes a lot of hard for a father to encourage his kids to perceive their dreams despite having a personal objection. I think at the back of their mind was a fact that if nothing works out Rakesh could always go back to his CA practice. And this sense of security gives Rakesh the courage to do what he did next.
Entering the stock market world :
So “Rakesh Jhunjhunwala” shifted to the Financial Capital Of India Mumbai with his brother who was also a practicing charted accountant himself. The biggest challenge in front of Rakesh was that he had no money to invest or trade. After all, making money from the stock market also requires money and he only had Rs5000 in his account.
Also, he didn’t have the option of borrowing money from his friends or family. But he got his first lucky breakthrough from his brother, who introduced Rakesh to a lady who was willing to loan Rs2,50,000 provided he can earn some decent returns on them. Later he got another client through its brother reference who loaned him another Rs500,000.
Now Mr-Rakesh Jhunjhunwala, had Rs7,50,000 to gets started. Remember 7.5 lack rupees may not look like a big amount today, but we are talking about the 1985 year. In today’s term, it would be equivalent to 35-40 lack rupees. So the first step was crossed. Rakesh now had the money, the question was!! what exactly was going to do with the money?? So he actively started looking for trading opportunities in the Indian Stock Market.
Fact: The ace investor that we know and admire today actually started as a trader, not an investor.
He made his first big profit in Tata Tea. A stock he bought for Rs43 and which Rs143 within a matter of 3 months. So by taking similar trades between 1986 to 1989. Mr.Rakesh Jhunjhunwala earned about 20-25 lack rupees and his net worth went up to 50 lack rupees. Now he struggles for the next couple of years but then he got the next major breakthrough in his career.
He saw a great opportunity in a company called Sesa Goa which is now part of the Vedanta group. There was a depression in the Sesa Goa industry. The stock of Sesa Goa trading at a discounted price of 24-25 rupees. Mr.Rakesh Jhunjhunwala saw a huge opportunity in this undervalued stock and bought ₹1 crores worth which he later sold 4 to 5 times at a higher price. This single trade catapulted his net worth to ₹2.5 crores. But the best was yet to come.
In 1989 there was a lot of pessimism in the stock market regarding the budget that was going to be presented by the VP Singh government. The market had significantly corrected before the budget. Because it was assumed that it would not be a business-friendly budget. So what he did?
At the time when everybody was pessimistic Mr.Rakesh bought aggressively and its instant turn out to be right. The budget turned out to be business-friendly, and the market changes so heavily that in the next few months the Rakesh Jhunjhunwala net worth went up to 20 times from ₹2.5 crores to ₹50 crores.
This one event inspires me the most about Mr.Rakesh Jhunjhunwala’s journey that not only he had good trading expertise but he also had the guts to go big on them. So it’s not sufficient you should also have the same confidence that what differentiates men from boys.
Later in his career, Mr.Rakesh started his own investment company called “Rare Enterprises.” And the name basically comes from the initial two letters of Rakesh and the two letters of his wife Rekha. So from there onwards, trading took a back seat and Mr.Rakesh slowly shifted toward investing. Over the years he has rarely profitable bets companies like Titan, LUPIN, Crisil, Praj, and several other companies that catapulted his wealth to ₹20,000 crores as of 2018.
It is also important to understand that not every investment Mr.Rakesh was made was successful. In fact, he faces significant losses in investments such as MRVL, DHFL, GEOJIT BNP PARIBAS, and a lot of other companies.
Rakesh Jhunjhunwala Portfolio :
According to the latest reports, Mr.Rakesh holds more than 30 stocks with a net worth over 10,000 crores. Some of them are as follows:
Titan, LUPIN, Agro Tech Food, SpiceJet, CRISIL, VIP Industries, and more.
Rakesh Jhunjhunwala Net Worth :
Mr.Rakesh holds a net worth more than $3 billion. Which is equivalent to 2,25,96,00,00,000.00 rupees.
Do read our previous Article on Ratan Tata and plz share your beautiful thoughts in the comment section below.