FACTBOX-Jhunjhunwala's top holdings
Fri Jun 15, 2012 2:57am IST
MUMBAI, June 15 (Reuters) - Billionaire investor Rakesh
Jhunjhunwala has made a fortune and attracted a large following
in India with his bold bets on domestic stocks. Many call him
'India's Warren Buffett'. Unlike the famed Omaha investor,
Jhunjhunwala is a fan of leverage, which perhaps best defines
his investment strategy.
Following are the top six holdings held by Jhunjhunwala,
based on stock exchange filings.
COMPANY STAKE (%) YTD PERFORMANCE
(to June 13) (%)
Aptech 32.19 +10.6
A2Z Maintenance 19.10 +20.5
Viceroy Hotels 11.2 +42.4
Autoline Inds 10.25 +73.4
Zen Technologies 10.1 +17.7
Titan Industries 10.0 +27.5
For comparison, the NSE index, or Nifty, is up 10.7
percent so far
this year.
"I'm Jhunjhunwala", not India's Buffett
By Rafael Nam and Abhishek Vishnoi
MUMBAI | Fri
Jun 15, 2012 12:27pm IST
(Reuters) - India's best known stock investor, billionaire
Rakesh Jhunjhunwala, doesn't much like the moniker of 'India's Warren
Buffett'.
"It's not a fitting
comparison. In terms of wealth and success and maturity, he's far, far
ahead," says Jhunjhunwala in an interview at his office in a prime
location in Mumbai overlooking the Arabian Sea.
Much like the famed Omaha investor, Jhunjhunwala has made a fortune from some
savvy investments - Forbes magazine puts his net worth at $1.1 billion, ranking
him 41st on India's
rich list - but the similarities end there. Dressed simply in a white shirt and
grey pants, he draws heavily on a cigarette, burps loudly, tells ribald jokes
and peppers his interview with the cliches and one-liners that have become his
stock-in-trade.
The 51-year-old has the
brash confidence of a self-made man - he built his fortune from an early bet on
Tata Tea - and of a risk-taking investor.
"I'm not a clone of
anybody. I'm Rakesh Jhunjhunwala," he booms. "I've lived the world on
my own terms. I do what I enjoy. I enjoy what I do."
Unlike Buffett,
Jhunjhunwala has been an advocate of leverage, which he has often used in his
career and perhaps best defines his big, bold bet investment philosophy.
"See, I'm a risk
taker," he says. "If I feel very opinionated, I can really put the
money on the table. I don't think too much deep research is needed. I don't go
into analysis paralysis," he says. "All you need is common
sense."
(Also know about
Jhunjhunwala's top holdings, click here)
VIRTUE OF RISK
"Trend is your
friend," he quips, adding that at a time of intense global market
volatility he is fully invested, yet cautious about adding too much risk. He
has, however, extolled the virtue of risk and profited from being able to make
big contrarian bets - as he did in the aftermath of the September 11, 2001
attacks in the United States.
Markets, he says, have
priced in a Greek exit from the euro zone, but the bigger concerns are about
other vulnerable single currency members, a United
States that's "on steroids" and a "crisis
of governance" in India.
"When there's doom and gloom, don't forget there's darkness before
dawn," he says.
Despite the concerns
over weak governance, he's still a believer in the India story that has made him rich.
"When a child is sick, the mother is concerned. It doesn't mean the
child's going to die," he says.
In a country that
reveres its gurus, Jhunjhunwala, with his large frame and small glasses, would
be easy to parody - there is a fake blog that lampoons the investor's life -
but thousands hang on his every market move.
"Many clients ask
when we recommend stocks whether Rakesh has bought it, and what he's
holding," said Chirag Shah, assistant vice president for dealing at broker
Bonanza Portfolio. "People follow him like anything. Whenever they come to
know that he's taken a stake in a stock, they try to invest in it."
For the record, he's
bullish on retail, financial services, agriculture and software services, but
he declines to elaborate.
A BUMPER CUPPA
Jhunjhunwala's passion
for playing the market began as a teenager, prompted by his father, a
government tax official, pointing out stocks that would react to the day's
news.
He made his first big
profit by borrowing what in 1986 was a sizeable sum to buy 5,000 shares in Tata
Tea, confident that the markets had under-estimated the potential of a company
looking to grow at a time of rising yield production. He trebled his money
within months. "I was apprehensive, but if you don't have confidence, you
shouldn't come to the stock market. You have to risk," he recalls.
Better, bigger
investments followed, including a leveraged bet in the late 1980s on iron ore
exporter Sesa Goa (SESA.NS). He bought
the stock at 60-65 rupees each and sold at 2,200 rupees.
His timing has been
fortuitous. The Bombay Stock Exchange, Asia's
oldest, introduced the benchmark Sensex in 1986 and markets
developed swiftly after economic liberalisation five years later. "I'm the
right person at the right place with the right attitude," he says.
"If the Sensex had not gone up 100 times from when I started, I could not
have been successful."
The index has dropped more
than 9 percent in the past 16 weeks as India's economic growth stutters,
prompting a warning from Standard & Poor's that its credit rating could be
downgraded to junk status because of political inaction.
RARE BREED
Today, Jhunjhunwala
presides over his investment firm Rare Enterprises, named using his and his
wife's initials, which has a dozen or so employees whose sole job is to help
him make his market bets. "This isn't a fund. I have no money other than
my own and my wife's," he says. "She's my only client. I don't manage
anybody's money except hers."
Jhunjhunwala's office
has three monitor screens and an ashtray. There is a large conference table,
statues of Ganesha, and framed copies of Jhunjhunwala's 10 Commandments for
Investing and 10 Commandments for Trading.
Some of the commandments
are slightly misspelt, but that wouldn't seem to matter to him. "Even if
my wealth is 20 percent of what it is today, I'd smoke the same cigarette,
drink the same whisky, drive the same car, have the same office, the same
house, wear the same clothes, have the same wallet, eat the same food," he
says. "Money is not anything which is going to affect me, or the way I
live."
He says he will give
away a quarter of his wealth.
Jhunjhunwala may not
take the trappings of his work too seriously, but he is dedicated to trading,
and portraits of well-known investors Peter Lynch and John Templeton hang in
the company's offices. There is also a bound collection of his speeches
covering his investment methodology, such as evaluating corporate
price-to-earnings ratios - a hark-back to his studies in chartered accountancy.
He also includes a prayer from the Dalai Lama, and an eclectic compilation of
quotations from Shakespeare and Voltaire to George Soros and Buffett.
MIDAS TOUCH?
His financial disciples
continue to be swayed by his track record. Shares in A2Z Maintenance and
Engineering Services (ATOZ.NS) jumped as
much as 11 percent on May 23 after he and his wife disclosed buying 2.65
million shares of the company.
Do all his investments
turn to gold? He's not saying. He does not report his holdings as a private
investor, or dwell on past mistakes.
"People will only
know of my good side, and not the mistakes I've made. I know what my mistakes
have been, and what they've cost me financially. But I'm not bothered about
that because I only look at the end results," he said.
Jhunjhunwala has no
plans to leave his business to his three children or burning ambition to found
a financial conglomerate, unlike other Indian billionaires such as Uday Kotak,
who started small but went on to build Kotak Mahindra Bank (KTKM.NS).
"All I've known is
trading and investing. I don't want to do anything else in life," says
Jhunjhunwala. "I'll call it quits the day I die."
(Additional reporting by
Divya Chowdhury; Editing by Ian Geoghegan)
