The man who turned into India’s Big Bull started on a very tough note, says the book, The Big Bull of Dalal Street.
I had expected the book on Rakesh Jhunjhunwala to be a tome, he was, after all, known as the Big Bull of India’s financial markets. But the one that has come out of the stable of Penguin looks like a reporter’s notepad, genuinely thin. The Big Bull of Dalal Street, penned by not one but three writers, is peppered with anecdotes that show the ups and downs of the man who set guidelines in the markets of India’s financial capital.
When he started, Jhunjhunwala was just another stock trader, a stock salesman. And there were many like him in Mumbai. But when he left, Jhunjhunwala was, arguably, India’s biggest and best trader-turned-investor.
Three authors have worked on the book, almost like multiple Belgian diamond experts joining hands in the laboratory to craft the best solitaire. There is Neil Borate, deputy editor at Mint, financial journalist Aprajita Sharma and Aditya Kondawar, partner and vice president at Complete Circle, a financial services company. And then you have a foreword by corporate tracker and author Vivek Kaul. It looks like Four Musketeers at work with a certificate of excellence from Kaul.
Dalal Street is home to the Bombay Stock Exchange (BSE), housed in the imposing 29-storey skyscraper known as Phiroze Jeejeebhoy Towers. Vivek Kaul, whose knowledge of the markets is immense, wrote how writers Saurabh Shukla and Anurag Thakur penned the line “Mumbai ka king kaun” for Ram Gopal Varma’s Satya. I remember how Varma picturised the scene from a vantage point overlooking the Mumbai skyline. I didn’t know the words were modelled on the life and times of Jhunjhunwala. That’s the brilliance of Kaul, a great insider.
I guess this must have been a tough assignment for the authors, ostensibly because there are just no research material on Jhunjhunwala and his works, at the best you could spend some time with Ramesh Damani, the top broker who is also a fitness freak and a runner, and get into the mind of the Big Bull. So I found the first job—as Kaul wrote—a great job. Why not, it opens up the world of Jhunjhunwala.
So, the man who turned into India’s Big Bull started on a very tough note, says the book. His father never gave Jhunjhunwala a penny to invest in the stock market. Jhunjhunwala once asked his father for Rs 12 lakh and the promise was to return the cash in three years. Do you know what Jhunjhunwala Sr told his son: “You have a right in your ancestral capital. I am afraid your grandfather didn’t leave any.” No one knew the story till Rakesh narrated it at a youth conclave in Mumbai.
The million-dollar question is what do you do then? How do you chart your life? Jhunjhunwala moved ahead, knowing very well the importance of the hare and tortoise race of life.
The first bet was in Sesa Goa, a company that is now part of Anil Aggarwal’s Vedanta. He picked up Rs 50-55 lakh and bought 300,000 Sesa Goa shares worth Rs 1 crore using forward trading (that translates into a debt-fuelled or a leveraged trade). The price went from Rs 26 to 65 in three months and to Rs 2,200 in three years. The result: Jhunjhunwala had a capital of Rs 2-2.5 crore. It was a lot in 1990, the year when V.P. Singh resigned as the Prime Minister, Bhagwan Osho Rajneesh crossed the rainbow bridge, and two communists brutally raped and killed two UNICEF workers at Bantala, West Bengal for whistle blowing against corruption.
I read in the book that in 1990 Jhunjhunwala conducted his first short trade during the tumultuous days of the Gulf War. No one knows if he succeeded or not. Remember, those were the days when Harshad Mehta—who loved being called the Big Bull—was tormenting the markets. Jhunjhunwala initially benefited from the Mehta selection of stocks but soon he turned bearish, something went through his mind about Mehta’s dubious ways of pushing stocks.
Let me take a break from the book and pick up Jhunjhunwala’s spirited bidding of stocks. He was a rarity. Strange things happened with him. He would always tell some of my friends who were his drinking pals: “The market is much more confident, so am I.” Jhunjhunwala—it seemed to me—was the most appropriate man for India’s stock markets, a performance that can be attributed to the fact that his wealth, and that of his wife, Rekha, grew by leaps and bounds. Jhunjhunwala knew the whole size of the markets, big, medium or small. Now stock markets either love or ignore the middle segment. This is strange, it is a kind of fickleness that creates a niche for firms devoted to the middle market, who know the companies and the investors willing to finance them. Jhunjhunwala knew them all, that was his strength.
His privately owned stock trading firm Rare Enterprises, derives its name from the first two initials of his name and his wife Rekhas name. Jhunjhunwala was an investor in new, low-cost airline Akasa Air, which launched in August 2022. A movie buff, Jhunjhunwala has co-produced several Bollywood films, starting with Sridevi-starrer English Vinglish. What is interesting is that Jhunjhunwala didn’t even hear the script before backing the film.
When he entered the stock market in the mid-80s, BSE was only 150 points (currently, BSE is trading over 35,000 points). He once famously said, “Markets are like women—always commanding, mysterious, unpredictable and volatile.” His ability to invest in the right asset at the right time had been critical for his success. He had an estimated net worth of $5.8 billion as of August 2022, according to Forbes.
Was it all roses for the Big Bull? Certainly not. Consider the case of DHFL and the role of the Wadhwans in messing up the whole company. Jhunjhunwala, claims the book, confessed in a chat with his friend Ramesh Damani and N. Jayakumar of Prime Securities that he had invested into DHFL without any research only because it was quoting at a rock-bottom valuation, offered a high dividend yield and had been growing consistently at 20% for the last ten years. In 2013, Jhunjhunwala had bought 25 lakh shares of DHFL for Rs 34 crore. And then, the cracks started appearing. Jhunjhunwala reduced his holdings to 2.46%. And finally, DHFL ceased to be an entity and ran up a debt bill of Rs 90,000 crore. The Piramal Group acquired DHFL for Rs 34,250 crore.
Never mind his losses, Jhunjhunwala was able to offset declines in a competitive equity environment by stocks where the spreads were wider and the profit potential better. Dalal Street loved the Big Bull, every time Jhunjhunwala walked into a meeting there was someone who had a relationship and rapport with him.
The book has a very significant chapter on Jhunjhunwala and his wife and the couple’s involvement in A2Z Infra, a company which was involved in the state-owned power sector and suffered from poor capital allocation and poor capital structure. This created, claims the book, a vicious circle and messed up the company. It’s a big chapter and I need not reproduce it here. In June 2012, the Jhunjhunwala couple had a 22.68% stake in the company, it came down to 3.4% in December 2014. And in the next month, the Jhunjhunwalas were not among the shareholders.
So, what is the lesson? The never-ending quest to be big, bigger, biggest can sometimes take a break. That is the time to rebuild, which Jhunjhunwala did best. He loved Bollywood, a friend in Mumbai who knew him told me he once told Jhunjhunwala that the most appealing title for him would be from the Aamir Khan starrer, Jo Jeeta Wahi Sikandar.
Jhunjhunwala smiled. He was a man of few words. And he spoke, he spoke wisely, like the Great Khan. No wonder he once said—probably in 2021—the next century belongs to India, and India’s bull run has just started.
Legends are, actually, born optimists. Has the book flooded Dalal Street? It should have by now. Are you still wondering what happened to some of the other stocks which were his favourites and helped him inflate his kitty? Don’t speculate like Jhunjhunwala, grab a copy.
It will be a great investment to know the Pied Piper of Indian Bourses, one of India’s biggest traders and investors.