Jhunjhunwala's -- not India's Buffett--41st on India's Rich List

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)

http://in.reuters.com/article/2012/06/15/india-jhunjhunwala-buffett-idINDEE85D0JX20120615