The Story of Rakesh Jhunjhunwala, Who Turned Rp975,000 into Rp94 Trillion

Jakarta, CNBC Indonesia - Indian investor Rakesh Jhunjhunwala successfully turned a small capital into a fantastic fortune amounting to tens of trillions of rupiah. He is nicknamed the “Warren Buffett of India” for his exploits in the stock market.

His current net worth is recorded at US5.8billion, orequivalenttoRp96.8trillion(assuminganexchangerateofRp16, 350/US). Citing Traders Brain India, Rakesh started his investments with only around Rp975,000.

His success story is inseparable from the influence of his father, who worked as an income tax officer. Born in Mumbai on 5 July 1960, Jhunjhunwala often heard discussions about the stock market from his father and his colleagues from a young age, which sparked his interest in the investment world.

Due to his high curiosity about stocks, one day he asked his father why stock prices fluctuated every day.

His father suggested that he read the newspaper because news is what causes stock prices to fluctuate.

Rakesh Jhunjhunwala also expressed his desire to pursue a career in the stock market. However, his father advised him to first obtain a bachelor’s degree from a university.

Rakesh Jhunjhunwala graduated from Sydenham College in 1985 as a chartered accountant. After graduating, he again discussed his goal of pursuing a career as a stock market investor with his father.

In response, his father said that he was allowed to pursue any career. However, his father also added that he would not provide money, and Rakesh should not ask for initial capital from his father’s friends.

Rakesh Jhunjhunwala entered the stock market with an initial capital of only Rp975,000 in 1985. At that time, the Sensex index was at 150 points (currently, the Sensex is around 58,500 points).

However, not long after, Rakesh Jhunjhunwala managed to secure Rp487,500,000 from one of his relative’s clients with a promise to provide a higher return than fixed deposits.

Rakesh Jhunjhunwala’s first major profit was Rp97,500,000 in 1986. He bought 5,000 shares of Tata Tea for Rp8,385, and within three months, those shares were traded at Rp27,885. He achieved a profit more than three times over by selling those Tata Tea shares.

While Jhunjhunwala has always been cautious in supporting new-era startups, in recent years, he began to reap significant profits from a series of private equity investments as those companies went public.

For example, his 14% stake in footwear retailer Metro Brands, which went public last December, made its owner Rafique Malik a billionaire and is now worth more than US$400 million.

He was also an early backer of gaming company Nazara Technologies and general insurance firm Star Health and Allied Insurance Company, both of which listed last year.

In a move considered risky by many, Jhunjhunwala’s latest bet is on the Covid-19-hit sector: aviation.

Last year, he invested $35 million for a 40% stake in low-cost carrier Akasa, which made its maiden flight earlier this month, launched by the country’s aviation minister and with its well-known investors.

With a taste for single malt and cigars, Jhunjhunwala enjoys living like a king. He is reportedly building a luxurious 13-storey house in south Mumbai as his new home. As a Bollywood film enthusiast, Jhunjhunwala financed several films such as English Vinglish and Ki & Ka.

At the same time, Jhunjhunwala is among the country’s prominent philanthropists with a foundation named after him and stated a few years ago that he wants to donate 25% of his wealth during his lifetime.

He is one of the founders and trustees of Ashoka University, a liberal arts school, and a regular donor to the Agastya International Foundation, which provides science education to the poor.

Ashoka University, in a statement, described Jhunjhunwala as one of its largest donors and said he was scheduled to visit the university at the end of this year to launch the Rakesh Jhunjhunwala School of Economics and Finance.

Jhunjhunwala was reported to have died in August 2022 at a hospital in Mumbai city. The hospital stated that the cause of death was a “sudden heart attack”.