Rakesh Jhunjhunwala: The fire of investing in stocks is still in me. I eat, sleep and live markets

Markets are still at the core but of late, he has widened his universe to include two ingredients, family and philanthropy.

By Ahona Ghosh, ET Bureau | Updated: Aug 26, 2011, 02.45 PM IST

Aninvestor with the Midas touch, lover of the king-size life, a relatively recentfamily man, and now a budding philanthropist. ET attempts to unravel themultilayered world of RakeshJhunjhunwala

July5, 2010: Rakesh Jhunjhunwala (RJ) iscelebrating his 50th birthday in Mauritius at the InterContinental hotel.He’s flown in along with 250 friends who will partake of the festivitiesover three days. The birthday boy has also brought along 12 of his cooks toprepare special Marwari dishes for his guests; a part of the hotel has beencordoned off for thispurpose.

On the guest list,which includes some of Dalal Street’s and India Inc’s biggest moversand shakers, is Hiren Ved, a director and chief investment officer at theRJ-owned Alchemy Capital. Ved, who has known RJ for 17 years and fondly refersto him as bhaiya, still has one vivid image of the revelries etched in his mind,RJ on the dance floor.

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“Hewas dancing his heart out with this shirt tails out, least bothered what othersthought of him,” chuckles Ved. That’s the credo India’s firstinvestor to make a billion dollars from the stock market, that’s how muchForbes had estimated his net worth in 2008, swears by. And at 51, RJ still hasthe time and energy to work hard and party harder.

“If we were partying inHong Kong till 6 in the morning or gambling till 3 in the morning, he would befully awake and on his screen tracking the Indian markets, which would open at6.30 am Hong Kong time. The rest of us could barely keep our eyes open,”recounts Ramesh Damani, a member of the Bombay Stock Exchange who has known RJfor the past 25 years.

If RJcan do that, it’s because he’s still an investor with fire in thebelly, sifting through a heap of stocks for tomorrow’s multi-baggers.“I still eat, sleep and live markets,” says the investor who waschristened India’s Warren Buffet for his penchant for, and success with,value investing. Sitting in his plush 15th floor office in South Mumbai’scommercial hub Nariman Point, RJ’s eyes light up when discussing stocks.

A diamond ring sparkles on afinger of his right hand as he flicks the ash of an India Kings cigarette into alarge marble ashtray. “Success is measured quantitatively by everyoneincluding myself. Money matters but I enjoy the process more, and have neverused unfair means to make wealth,” says RJ.

Marketsare still at the core and the good life a natural corollary, but of late, RJ haswidened his universe to include two ingredients, one that most people consider agiven; and the other that most folks don’t consider atall.

OTHERSIN THEPICTURE

Let’sstart with the firstelement:

Family.In June 2004, after 17 years of marriage, RJ and his wife had their first child,daughter Nishtha who is eight years old now. Two-and-a-half years ago they hadtwin sons. “The greatest joy in life is having a child. I adjust to theirtimings now; they can’t adjust to mine,” says the proudfather.

The even newerconstituent of RJ’s life is perhaps more unlikely, the man who believesthat greed is good also believes giving is good. Recently, he announced in apublic forum his intention to pledge a fourth of his wealth by 2020, which hehopes will amount to a billion dollars, to charity. “Money is an outcomeand not the purpose... As of now it is just a pledge. I have not given away themoney but by God’s grace I am sure it will happen,” he says, addinghe also wants to be involved in deciding the causes into which the money goesand in monitoring itsdeployment.

A die-hardinvestor, lover of the good life, a relatively late family man, and now awannabe philanthropist, is RJ for real, or is this just a well craftedimage-building exercise? After all, as his detractors point out, and there are afew of them, RJ is just trying to mirror Buffett. After being put on the samepedestal as the Oracle of Omaha on the investing front, he wants to attain thesame status with his philanthropicefforts.

ANOPEN BOOK

Others point out tosome visible, if arguably superficial, contradictions in the man: his love ofthe tipple and everything else that goes with it don’t quite sit well withhis projection as a family man and as an enthusiasticphilanthropist.

Tobe sure, it’s easy to be sceptical about RJ with all his inconsistencies.Yet, here’s a man who has never attempted to hush up his lifestyle.“My biggest insecurity right now is my health. I eat at odd times, drinklike a fish and smoke like a chimney. I need to change my habits. I want to livelong not just for the kids but for myself,” says the man who startedtaking yoga classes six monthsago.

Such transparency spansacross his personal life to the professional. “When he bought Titan, thebenchmark of his portfolio, he shared his ideas with friends. Unlike othertraders who buy stocks secretly, he has always been transparent,” saysDamani. Today, RJ can look out of his duplex apartment in upscale Malabar Hillin South Mumbai and take in the sweeping view of the Queen’s Necklace witha Cuban cigar in one hand and a scotch tumbler in the other. But he didn’tget all this on a platter.

Theday this writer visits his home, she gets to see a totally different side to aman retail investors consider a god. The children are running around in thesprawling living room, a nanny is pandering to their needs, and at the otherside of the room a barrage of hired help is busy dusting, polishing and sweepingthe house.

That’s atypical Sunday morning at the Jhunjhunwala household. As RJ bids his yogateacher farewell in the second living room, he sits back in his chair and startsdescribing his earlier days. He got married in 1987 and for the next two years,had his back to the wall. The luxury RJ enjoys today was a distant dream then.“The markets were bearish, there was no activity. I had no income andpeople would advise me to seek another career,” says RJ as he dips agarlic toast into a cup of milk, his breakfast.

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BREATHINGWORK

In a short film made on RJfor his 50th birthday celebrations, longtime friend and investor RadhakrishnanDamani recollects their earlier days when they would spend hours discussing themarket till the wee hours of the morning.

One day, they were sitting onthe streets of Nariman Point till 3 am when a police car drove past and orderedthem to go home. “I went home, but Rakesh went to Delhi Darbar for biryaniand came back to my house at 5 am with the day’s newspapers to continueour discussion,” grinsDamani.

In his heyday, RJ wasknown to put in 16-18 hours tracking and talking stocks. These days he hasslowed down, although not by much. “Especially after his kids were born,he is making a lot of effort to spend time with his family and is looking afterhis health,” says Ved. Shankar Sharma, cofounder of First Global, says:“I keep telling him to lose weight, forget about the markets, and thathealth is more important.” Sharma and RJ have been involved in somespectacular faceoffs, but that’s only because of their contrasting stylesof investing, the former thinks macro and RJ’s approach is bottom-up.Otherwise, they’re perfectly comfortable meeting over adrink.

“Rakesh alwaystells me that people will be surprised to find us sitting together,” saysSharma. Perhaps with age both Sharma and RJ are more open to accepting eachother’s opinions, even if they are as forceful as they were in the past.As Ramesh Damani says: “He has reached a happy stage and has nothing toprove any more.”

Such astage in life allows for room for new-found indulgences. Recently RJ boughteight racehorses, stallions and fillies in a three-way partnership with twobusinessmen. RJ is a 50% owner and says he spent around Rs 75 lakh on thispurchase. Then, he has also forayed into Bollywood by teaming up withadman-turned-filmmaker R Balki to make a movie titled ‘HinglishEnglish.’ The film is about an Indian who goes to the US and learnsEnglish there. RJ is financing the project, he isn’t saying how much he issinking into it, that stars Sridevi and features Amitabh Bachchan in a smallrole.

ANEW DIMENSION

Beyond suchtreats, however, key events in RJ’s life have triggered actions of moreconsequence. After his daughter was born, RJ had this dream of starting anorphanage. A year ago he did just that. He opened an orphanage in Panvel on theoutskirts of Mumbai and has 80 children, between five and eight, enrolled. Overthe next two years, he wants to increase the count to 384. His brother Rajesh,who is also a CA like RJ, manages theorphanage.

“I haveenrolled them in English-medium convent schools and local Marathi schools. Iwill further the education of those who are academically inclined, and those whoare not, I will put into vocational training,” says RJ, who spends Rs3,500 per month on a child. “I spend 25% of my dividend income oncharity,” he adds. RJ is a firm believer in the virtuous cycle of greedand giving: “Making wealth and giving are two sides of the same coin. Youcan’t give it unless you make it.” He still wants to create wealth,perhaps now even fromoverseas.

“I want toreplicate in global markets what I have done in India,” says RJ.“(For that) I need to build a team which I am trying to do now.” Buteven such global ambitions may have to make way on the priority list for hischildren. Wife Rekha says that since their arrival, she has seen a 75%improvement in hisbehaviour.

“(Earlier) henever had any set time to come home. Often he wouldn’t come home till wellpast midnight,” she says. These days, she adds, RJ rushes home from workby 7.30 pm to help Nishtha with her homework. Rekha also points out that the manfamous for his erratic temper has calmed down over the years.

RJ jokes: “During our 24years of marriage I must have shouted 7,500 times at her and she has onlyonce.” Yet, some things just don’t change. Rekha says sometimes sheis embarrassed by her husband as he can never keep anything to himself.“There are many times when I don’t tell him things because hedoesn’t think before speaking and you never know when he will saywhat,” she says. But then again, RJ wouldn’t be RJ without hisindividuality, his quirks, his forceful opinions, his sharp mind, and hisunpredictability.

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