Rakesh Jhunjhunwala
Introduction
This is the story of Rakesh Jhunjhunwala and how he turned a mere 5000 rupees into a massive 20,000 crore rupees.
Rakesh Jhunjhunwala is arguably the king of Indian stock market. His success has inspired millions of Indians to participate in the stock market and his story is now a case study in almost every Business-school.
And why not? He is the one of the richest man around, with Forbes ranking him #61 in the list of richest people in India in 2018.
And this is especially impressive because he was not born into influential families like Tatas or Ambanis. He is a self-made billionaire, who some call “Big Bull” or “Warren Buffet of India”
So, what makes this man special? And more importantly, what is that you and I can learn from Mr. Jhunjhunwala’s success?
For that, let’s start from the beginning- his childhood.
Childhood
Rakesh was born in 1960 in a middle-class family. His father was an Income tax officer and mother was a housewife.
His father was interested in stocks though he not an active trader. When Rakesh was a young child, he would listen to his father and his friends discuss about the stock market. And he would listen to them very carefully.
One day, out of curiosity, he asked his father a very perceptive question “why do these stock prices fluctuate on a daily basis?” For a 9 year old kid it is a perceptive question.
To make things simple, his father told him to check if there is a news on a company called Gwalior Rayon in the newspaper, and if there was news then Gwalior Rayon’s price would fluctuate the next day. Basically, implying that any kind of a news flow potentially impacts the stock prices and that’s what happened.
In this way, young Rakesh got fascinated with the stock market and learned a lot from his father’s detailed explanations.
His father knew that the Rakesh was destined to go to stock market but he advised “do whatever you want in life but at least get professionally qualified.”
So, Rakesh completed graduation from Mumbai’s Sydenham College, took up chartered accountancy, and became a Chartered Accountant in 1985.
After finishing his studies, Rakesh told his father he wanted to go to the stock market. His father knew this was going to happen. So, even though he was reluctant at first, he encouraged Rakesh to pursue his dreams but just kept one condition: don’t ask money from me or my friends.
I think it takes a lot of heart for a father to encourage his kids to pursue their dream despite his personal objections. I think the back of both of his mind was the fact that if nothing works out, Rakesh could always go back to his CA practice. And this sense of security gave Rakesh the courage to do what he did next.
Here’s where his journey into stock market started
So, Rakesh shifted to the financial capital of India, Mumbai with his brother, who was a practicing Chartered Accountant himself.
The biggest challenge in front of Rakesh was that he had no money to invest or trade. After all, making money also requires money! And he only had 5000 rupees in his account and he didn’t have the option of borrowing money from friends or family.
But he got his first lucky break through his brother who introduced Rakesh to a lady who was willing to loan him 2.5 lakh rupees, provided he can earn decent returns on them.
Mr. Jhunjhunwala got another client who loaned him 5 lakh.
Now, Mr. Jhunjhunwala had 7.5 lakh rupees to get started. Remember, 7.5 lakh may not look like a big amount now but we are talking about 1985 here in today’s terms, it would be equivalent to almost 30-40 lakh rupees!
So, the first hurdle was crossed, Rakesh now had the money, the question was, what exactly was he going to do with that money?
He actively started looking for trading opportunities in the market. Yes, the ace investor that we all know and admire today actually started out as a trader, not an investor.
He made his first big profit in Tata Tea, a stock that he bought for 43 rupees and which shot up to 143 within a matter of 3 months. By taking some very astute trades, between 1986 to 89, Mr. Jhunjhunwala earned about 20-25 lakh rupees and his net worth went up to about 50 lakh rupees.
He struggled for the next couple of years but then he got the next major breakthrough of his career.
He saw a great opportunity in a company called Sesa Goa, which is now part of Vedanta group. There was a depression in the iron ore industry and stock of Sesa Goa was trading at a very discounted price of 24-25 rupees. Mr. Jhunjhunwala saw a huge opportunity in this undervalued stock and bought 1 crore worth, which he later sold at 3-5 times higher prices.
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 VP Singh’s government. The market had significantly corrected before the budget because it was assumed broadly that it would not be a business-friendly budget. But Mr. Jhunjhunwala’s gut instinct told him that Mr. VP Singh who basically came from a business background himself, would never present such a bad budget and so he aggressively bought at this time.
His instincts turned out to be true. Within a matter of few months, Mr. Jhunjhunwala’s net worth went 20 times, from 2.5 crores to about 50 crores.
This one event inspires me the most about Rakesh Jhunjhunwala’s journey that he not only had good trading instincts but also had the guts to go big on them. It is not sufficient that you could spot good opportunities; one should have the confidence to move decisively on those instincts. That’s what differentiates men from boys.
Before moving on, let’s pause here to absorb another fact that it is not investing but trading that earned him the capital to become a billionaire in future. So, he started with trading to generate capital and later on switched to investing to multiply that capital. This should give courage to those who have little capital. By honing the skill of trading, they can build the investment capital required for building long term wealth.
Started “RARE Enterprises”
Later in his career, Mr. Jhunjhunwala started his own investment company called “RaRe” enterprise, which basically was taken from the first two initials of Rakesh Jhunjhunwala and first two letters of his wife, Rekha.
From here on, trading took a backseat and Jhunjhunwala slowly shifted towards investing. Over the years, he made some really profitable bets such as Titan, Lupin, Crisil, Praj Industries, which catapulted his wealth to about 20,000 crores.
It is also important to understand that not every investment that Mr. Jhunjhunwala made was successful. In fact, he has incurred significant losses in investments such as Mandhana Retail Ventures, DHFL , Geojit Financial Services and a whole lot of companies.
But what sets Mr. Jhunjhunwala apart from a regular investor is that he is not easily scared by short term volatility in the stock market. He is very careful in analysing the fundamentals of the company and until the fundamentals are intact, he doesn’t care whether the stock goes up or down. His philosophy is that over a period of time, some stock will underperform and some will overperform but India’s growth story has just begun and eventually every patient investor will make money.
On the lighter side, very few people know this but Mr. Jhunjhunwala is also an influential personality in Bollywood. He has produced several Bollywood films as well, notable among are English Vinglish. He is also media savvy and can be seen regularly on major business channels.
A very admirable and underappreciated fact about Mr. Jhunjhunwala is that he is a also a big philanthropist. He has declared that by 2020, at his 60th birthday, he will donate some portion of his wealth to the poor. That tells me the man not only has the brains but also has a big heart.
I hope you would also be inspired by Mr. Rakesh Jhunjhunwala’s life story. Do checkout for the video on the top 5 lessons that we can learn from Mr. Jhunjhunwala.
Rakesh Jhunjhunwala
Introduction
This is the story of Rakesh Jhunjhunwala and how he turned a mere 5000 rupees into a massive 20,000 crore rupees.
Rakesh Jhunjhunwala is arguably the king of Indian stock market. His success has inspired millions of Indians to participate in the stock market and his story is now a case study in almost every Business-school.
And why not? He is the one of the richest man around, with Forbes ranking him #61 in the list of richest people in India in 2018.
And this is especially impressive because he was not born into influential families like Tatas or Ambanis. He is a self-made billionaire, who some call “Big Bull” or “Warren Buffet of India”
So, what makes this man special? And more importantly, what is that you and I can learn from Mr. Jhunjhunwala’s success?
For that, let’s start from the beginning- his childhood.
Childhood
Rakesh was born in 1960 in a middle-class family. His father was an Income tax officer and mother was a housewife.
His father was interested in stocks though he not an active trader. When Rakesh was a young child, he would listen to his father and his friends discuss about the stock market. And he would listen to them very carefully.
One day, out of curiosity, he asked his father a very perceptive question “why do these stock prices fluctuate on a daily basis?” For a 9 year old kid it is a perceptive question.
To make things simple, his father told him to check if there is a news on a company called Gwalior Rayon in the newspaper, and if there was news then Gwalior Rayon’s price would fluctuate the next day. Basically, implying that any kind of a news flow potentially impacts the stock prices and that’s what happened.
In this way, young Rakesh got fascinated with the stock market and learned a lot from his father’s detailed explanations.
His father knew that the Rakesh was destined to go to stock market but he advised “do whatever you want in life but at least get professionally qualified.”
So, Rakesh completed graduation from Mumbai’s Sydenham College, took up chartered accountancy, and became a Chartered Accountant in 1985.
After finishing his studies, Rakesh told his father he wanted to go to the stock market. His father knew this was going to happen. So, even though he was reluctant at first, he encouraged Rakesh to pursue his dreams but just kept one condition: don’t ask money from me or my friends.
I think it takes a lot of heart for a father to encourage his kids to pursue their dream despite his personal objections. I think the back of both of his mind was the fact that if nothing works out, Rakesh could always go back to his CA practice. And this sense of security gave Rakesh the courage to do what he did next.
Here’s where his journey into stock market started
So, Rakesh shifted to the financial capital of India, Mumbai with his brother, who was a practicing Chartered Accountant himself.
The biggest challenge in front of Rakesh was that he had no money to invest or trade. After all, making money also requires money! And he only had 5000 rupees in his account and he didn’t have the option of borrowing money from friends or family.
But he got his first lucky break through his brother who introduced Rakesh to a lady who was willing to loan him 2.5 lakh rupees, provided he can earn decent returns on them.
Mr. Jhunjhunwala got another client who loaned him 5 lakh.
Now, Mr. Jhunjhunwala had 7.5 lakh rupees to get started. Remember, 7.5 lakh may not look like a big amount now but we are talking about 1985 here in today’s terms, it would be equivalent to almost 30-40 lakh rupees!
So, the first hurdle was crossed, Rakesh now had the money, the question was, what exactly was he going to do with that money?
He actively started looking for trading opportunities in the market. Yes, the ace investor that we all know and admire today actually started out as a trader, not an investor.
He made his first big profit in Tata Tea, a stock that he bought for 43 rupees and which shot up to 143 within a matter of 3 months. By taking some very astute trades, between 1986 to 89, Mr. Jhunjhunwala earned about 20-25 lakh rupees and his net worth went up to about 50 lakh rupees.
He struggled for the next couple of years but then he got the next major breakthrough of his career.
He saw a great opportunity in a company called Sesa Goa, which is now part of Vedanta group. There was a depression in the iron ore industry and stock of Sesa Goa was trading at a very discounted price of 24-25 rupees. Mr. Jhunjhunwala saw a huge opportunity in this undervalued stock and bought 1 crore worth, which he later sold at 3-5 times higher prices.
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 VP Singh’s government. The market had significantly corrected before the budget because it was assumed broadly that it would not be a business-friendly budget. But Mr. Jhunjhunwala’s gut instinct told him that Mr. VP Singh who basically came from a business background himself, would never present such a bad budget and so he aggressively bought at this time.
His instincts turned out to be true. Within a matter of few months, Mr. Jhunjhunwala’s net worth went 20 times, from 2.5 crores to about 50 crores.
This one event inspires me the most about Rakesh Jhunjhunwala’s journey that he not only had good trading instincts but also had the guts to go big on them. It is not sufficient that you could spot good opportunities; one should have the confidence to move decisively on those instincts. That’s what differentiates men from boys.
Before moving on, let’s pause here to absorb another fact that it is not investing but trading that earned him the capital to become a billionaire in future. So, he started with trading to generate capital and later on switched to investing to multiply that capital. This should give courage to those who have little capital. By honing the skill of trading, they can build the investment capital required for building long term wealth.
Started “RARE Enterprises”
Later in his career, Mr. Jhunjhunwala started his own investment company called “RaRe” enterprise, which basically was taken from the first two initials of Rakesh Jhunjhunwala and first two letters of his wife, Rekha.
From here on, trading took a backseat and Jhunjhunwala slowly shifted towards investing. Over the years, he made some really profitable bets such as Titan, Lupin, Crisil, Praj Industries, which catapulted his wealth to about 20,000 crores.
It is also important to understand that not every investment that Mr. Jhunjhunwala made was successful. In fact, he has incurred significant losses in investments such as Mandhana Retail Ventures, DHFL , Geojit Financial Services and a whole lot of companies.
But what sets Mr. Jhunjhunwala apart from a regular investor is that he is not easily scared by short term volatility in the stock market. He is very careful in analysing the fundamentals of the company and until the fundamentals are intact, he doesn’t care whether the stock goes up or down. His philosophy is that over a period of time, some stock will underperform and some will overperform but India’s growth story has just begun and eventually every patient investor will make money.
On the lighter side, very few people know this but Mr. Jhunjhunwala is also an influential personality in Bollywood. He has produced several Bollywood films as well, notable among are English Vinglish. He is also media savvy and can be seen regularly on major business channels.
A very admirable and underappreciated fact about Mr. Jhunjhunwala is that he is a also a big philanthropist. He has declared that by 2020, at his 60th birthday, he will donate some portion of his wealth to the poor. That tells me the man not only has the brains but also has a big heart.
I hope you would also be inspired by Mr. Rakesh Jhunjhunwala’s life story. Do checkout for the video on the top 5 lessons that we can learn from Mr. Jhunjhunwala.
Rakesh Jhunjhunwala
Introduction
This is the story of Rakesh Jhunjhunwala and how he turned a mere 5000 rupees into a massive 20,000 crore rupees.
Rakesh Jhunjhunwala is arguably the king of Indian stock market. His success has inspired millions of Indians to participate in the stock market and his story is now a case study in almost every Business-school.
And why not? He is the one of the richest man around, with Forbes ranking him #61 in the list of richest people in India in 2018.
And this is especially impressive because he was not born into influential families like Tatas or Ambanis. He is a self-made billionaire, who some call “Big Bull” or “Warren Buffet of India”
So, what makes this man special? And more importantly, what is that you and I can learn from Mr. Jhunjhunwala’s success?
For that, let’s start from the beginning- his childhood.
Childhood
Rakesh was born in 1960 in a middle-class family. His father was an Income tax officer and mother was a housewife.
His father was interested in stocks though he not an active trader. When Rakesh was a young child, he would listen to his father and his friends discuss about the stock market. And he would listen to them very carefully.
One day, out of curiosity, he asked his father a very perceptive question “why do these stock prices fluctuate on a daily basis?” For a 9 year old kid it is a perceptive question.
To make things simple, his father told him to check if there is a news on a company called Gwalior Rayon in the newspaper, and if there was news then Gwalior Rayon’s price would fluctuate the next day. Basically, implying that any kind of a news flow potentially impacts the stock prices and that’s what happened.
In this way, young Rakesh got fascinated with the stock market and learned a lot from his father’s detailed explanations.
His father knew that the Rakesh was destined to go to stock market but he advised “do whatever you want in life but at least get professionally qualified.”
So, Rakesh completed graduation from Mumbai’s Sydenham College, took up chartered accountancy, and became a Chartered Accountant in 1985.
After finishing his studies, Rakesh told his father he wanted to go to the stock market. His father knew this was going to happen. So, even though he was reluctant at first, he encouraged Rakesh to pursue his dreams but just kept one condition: don’t ask money from me or my friends.
I think it takes a lot of heart for a father to encourage his kids to pursue their dream despite his personal objections. I think the back of both of his mind was the fact that if nothing works out, Rakesh could always go back to his CA practice. And this sense of security gave Rakesh the courage to do what he did next.
Here’s where his journey into stock market started
So, Rakesh shifted to the financial capital of India, Mumbai with his brother, who was a practicing Chartered Accountant himself.
The biggest challenge in front of Rakesh was that he had no money to invest or trade. After all, making money also requires money! And he only had 5000 rupees in his account and he didn’t have the option of borrowing money from friends or family.
But he got his first lucky break through his brother who introduced Rakesh to a lady who was willing to loan him 2.5 lakh rupees, provided he can earn decent returns on them.
Mr. Jhunjhunwala got another client who loaned him 5 lakh.
Now, Mr. Jhunjhunwala had 7.5 lakh rupees to get started. Remember, 7.5 lakh may not look like a big amount now but we are talking about 1985 here in today’s terms, it would be equivalent to almost 30-40 lakh rupees!
So, the first hurdle was crossed, Rakesh now had the money, the question was, what exactly was he going to do with that money?
He actively started looking for trading opportunities in the market. Yes, the ace investor that we all know and admire today actually started out as a trader, not an investor.
He made his first big profit in Tata Tea, a stock that he bought for 43 rupees and which shot up to 143 within a matter of 3 months. By taking some very astute trades, between 1986 to 89, Mr. Jhunjhunwala earned about 20-25 lakh rupees and his net worth went up to about 50 lakh rupees.
He struggled for the next couple of years but then he got the next major breakthrough of his career.
He saw a great opportunity in a company called Sesa Goa, which is now part of Vedanta group. There was a depression in the iron ore industry and stock of Sesa Goa was trading at a very discounted price of 24-25 rupees. Mr. Jhunjhunwala saw a huge opportunity in this undervalued stock and bought 1 crore worth, which he later sold at 3-5 times higher prices.
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 VP Singh’s government. The market had significantly corrected before the budget because it was assumed broadly that it would not be a business-friendly budget. But Mr. Jhunjhunwala’s gut instinct told him that Mr. VP Singh who basically came from a business background himself, would never present such a bad budget and so he aggressively bought at this time.
His instincts turned out to be true. Within a matter of few months, Mr. Jhunjhunwala’s net worth went 20 times, from 2.5 crores to about 50 crores.
This one event inspires me the most about Rakesh Jhunjhunwala’s journey that he not only had good trading instincts but also had the guts to go big on them. It is not sufficient that you could spot good opportunities; one should have the confidence to move decisively on those instincts. That’s what differentiates men from boys.
Before moving on, let’s pause here to absorb another fact that it is not investing but trading that earned him the capital to become a billionaire in future. So, he started with trading to generate capital and later on switched to investing to multiply that capital. This should give courage to those who have little capital. By honing the skill of trading, they can build the investment capital required for building long term wealth.
Started “RARE Enterprises”
Later in his career, Mr. Jhunjhunwala started his own investment company called “RaRe” enterprise, which basically was taken from the first two initials of Rakesh Jhunjhunwala and first two letters of his wife, Rekha.
From here on, trading took a backseat and Jhunjhunwala slowly shifted towards investing. Over the years, he made some really profitable bets such as Titan, Lupin, Crisil, Praj Industries, which catapulted his wealth to about 20,000 crores.
It is also important to understand that not every investment that Mr. Jhunjhunwala made was successful. In fact, he has incurred significant losses in investments such as Mandhana Retail Ventures, DHFL , Geojit Financial Services and a whole lot of companies.
But what sets Mr. Jhunjhunwala apart from a regular investor is that he is not easily scared by short term volatility in the stock market. He is very careful in analysing the fundamentals of the company and until the fundamentals are intact, he doesn’t care whether the stock goes up or down. His philosophy is that over a period of time, some stock will underperform and some will overperform but India’s growth story has just begun and eventually every patient investor will make money.
On the lighter side, very few people know this but Mr. Jhunjhunwala is also an influential personality in Bollywood. He has produced several Bollywood films as well, notable among are English Vinglish. He is also media savvy and can be seen regularly on major business channels.
A very admirable and underappreciated fact about Mr. Jhunjhunwala is that he is a also a big philanthropist. He has declared that by 2020, at his 60th birthday, he will donate some portion of his wealth to the poor. That tells me the man not only has the brains but also has a big heart.
I hope you would also be inspired by Mr. Rakesh Jhunjhunwala’s life story. Do checkout for the video on the top 5 lessons that we can learn from Mr. Jhunjhunwala.
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