AMERICAN BILLIONAIRE investor Charlie Munger once said that big money was not in buying and selling, but in the waiting. Rakesh Jhunjhunwala’s investment style echos this strategy. Case in point—his holding in Titan Company.
Jhunjhunwala began investing in the Tata Group-owned watch and jewellery maker back in 2002. And, in 20 years, its worth alone has risen to over 111,000 crore. Stock exchange data for the April to June quarter shows that Jhunjhunwala and his wife, Rekha, together held 4,48,50,970 shares of Titan, which gave them a 5.05 per cent stake in the company.
Over the years, starting from 1985, Jhunjhunwala had built a portfolio of 32 stocks through the privately held RARE Enterprises. Apart from Titan, he and his wife also invested in several other Tata companies like Tata Motors DVR (2.95 per cent stake), Tata Communications (1.08 per cent), Rallis India (9.81 per cent) and Indian Hotels (2.12 per cent), indicating his faith in the Tata Group. “He had tremendous regard for the Tata Group,” noted N. Chandrasekaran, the chairman of Tata Sons, in his condolence message.
Jhunjhunwala’s other notable investments included ratings agency CRISIL (5.48 per cent stake), farm equipment maker Escorts, footwear company Metro Brands (14.4 per cent stake), gaming company Nazara Technologies (10.03 per cent stake), Aptech (23.37 per cent stake) and Fortis Healthcare (4.23 per cent stake). He also backed Star Health and Allied Insurance, in which he and his wife held 17.49 per cent stake.
His long-term bets have paid off; the day he died, on August 14, his net worth stood at over $5.8 billion, according to Forbes.
“[He was a] man with a sixth sense about stock bargains,” said Raamdeo Agrawal, chairman and co-founder of Motilal Oswal Financial Services. He calls Jhunjhunwala “yaaron ka yaar” (a friend among friends).
“When I hear Rakesh Jhunjhunwala’s name, the first thing that comes to my mind is his love for India, his love for the markets, his love for his friends and his love towards life. Rakesh was a very unique personality,” said Agrawal.
Not all of Jhunjhunwala’s bets were successful, though. For instance, he had invested in Mandhana Retail, which sold actor Salman Khan’s Being Human brand. He sold the shares last year at a loss. Similarly, his bet on Dewan Housing Finance Ltd (DHFL) also backfired after insolvency proceedings were initiated against the mortgage lender.
His name also cropped up in an insider trading case related to Aptech shares. Jhunjhunwala, Rekha and eight others settled the matter in 2021 by paying Sebi 137 crore. While Jhunjhunwala paid 118.5 crore, Rekha paid 13.2 crore.
Following Jhunjhunwala’s death, what happens to his property, including the stocks he held, is a question many would have had. He had made arrangements to ensure a smooth succession and is learnt to have left his assets to his wife and three children. “Rakesh Jhunjhunwala, a true nationalist, lived a life committed to the India story. His unwavering belief in Indian entrepreneurs and enterprise will certainly outlive him. True to his nature and unerring eye for detail, he had planned and meticulously executed a smooth transition to sustain and enhance his legacy,” the RARE Group said in a statement.
The smooth succession and the fact that his investments will continue to be managed by his company are the reasons why there will not be any impact on the shares of companies he had invested in, say analysts.
After his death, the performance of stocks has been mixed. As of August 17, Titan shares were up 0.8 per cent from the closing price on August 12. Tata Motors (DVR) gained 3.2 per cent, Indian Hotels rose 1.2 per cent, and Tata Communications was down 1.7 per cent. Aptech has corrected 0.8 per cent, while CRISIL is down 1.3 per cent. Star Health, meanwhile, is up 0.8 per cent and Nazara Technologies gained 3.4 per cent.
Jhunjhunwala was a firm believer in India and was always bullish on the country’s growth story. His investment in the low-cost airline Akasa is a case in point. India’s airline industry has struggled over the last few years and made huge losses during the pandemic. But, Jhunjhunwala was convinced that a well-run frugal airline could succeed in an under-penetrated market like India. He put his money where his mouth is and invested $35 million for over 40 per cent stake in the airline.
Just a week before Jhunjhunwala died, Akasa launched its maiden flight. Vinay Dube, founder and CEO of Akasa, said they would honour his legacy, values and belief by striving to run a great airline.
But, with its biggest backer no more, will it impact Akasa’s growth story? Unlikely, say experts. “Airlines are a long-term investment, where break-even takes years. So, one would like to think that the investment made by Jhunjhunwala was one that should survive him not being there,” said an industry observer.
Akasa has a strong management. Dube is an industry veteran and was formerly CEO of Jet Airways and later GoAir (now Go First). Co-founder Aditya Ghosh was earlier the president of IndiGo, India’s largest airline.
“We are thankful that Mr Jhunjhunwala supported us in recruiting some of the best aviation talent in the country. He wanted us to have a top-notch leadership team that made all day-to-day decisions at the airline without having to fall back on him or any other investor,” said Dube.
He added that, thanks to Jhunjhunwala, Akasa was well-capitalised to induct 72 aircraft over the next five years. The airline has so far received three aircraft. “Our financial platform is strong enough to allow Akasa to place an aircraft order in the next 18 months that will be significantly larger than our first,” said Dube. “In simple terms, our growth is secure.