The Jhunjhunwala Magic

Sharekhan presents a list of companies that buzzed on D-street the moment billionaire investor Rakesh Jhunjhunwala eyed them.

Rakesh Jhunjhunwala, Partner, Rare Enterprises and our very own Indian Warren Buffet, has made some companies buzz on the street with his expression of interest in them. Sharekhan presents a list of such companies that did magic on D-streets the moment billionaire investor Rakesh Jhunjhunwala eyed them. The list is sorted with recency from lastest to last.



1. Symphony- On September 27, 2011, news of Billionaire investor Rakesh Jhunjhunwala picking up 5% stake in cooling equipment maker Symphony hit streets. Symphony rose over 7%, and touched the day’s high of Rs1,420 on the BSE on September 27, 2011. (CMP: Rs1,395, up 9.96% as on September 27th, 2011)

2. Pipavav Shipyard- Pipavav Shipyard shares rose 4.7%, or Rs3.50, to Rs76.90 on the Bombay Stock Exchange in an overall weak market on September 6, 2011 the moment buzz of Billionaire investor Rakesh Jhunjhunwala picking up stake in Nikhil Gandhi-promoted Pipavav Defence and Offshore Engineering Company Limited ( Pipavav Shipyard) through convertible share warrants hit streets. (CMP: Rs78.35, down 3.75% as on September 27th, 2011).

3. Sterling Holiday Resort India- Billionaire Rakesh Jhunjhunwala and investor Radhakrishna Damani had plans to buy 1 crore shares in Sterling Holiday Resort India up to Rs90 a piece, providing the much-needed funds for the financially-troubled company. The company's shares rose 20% to Rs122.90 on July 20, 2011 - the upper limit- possibly on some traders getting a hint of the development. (CMP: Rs97, up 1.57% as on September 27th, 2011).

4. Subex- Shares of Subex rose nearly 11% to Rs67.10 on July 20, 2011 after Rakesh Jhunjhunwala bought around 2% stake in the company in the quarter ended June 30. (CMP: Rs43.85, up 2.33% as on September 27th, 2011).

5. A2Z Maintenance & Engineering Services- Rakesh Jhunjhunwala along with wife acquired 1.85% additional stake in Delhi-based infrastructure services firm A2Z Maintenance & Engineering Services Ltd on its debut, when the stock was not greeted with any fanfare by the investors. Jhunjhunwalas acquired the shares at around Rs350 a piece translating into a deal worth Rs48 crore. The stock had opened 2.5% below its issue price of Rs400 and closed the day at Rs329, about 17% below the issue price. The stock was up 2.77% during early trading hours on December 24, 2010, probably after the news that Jhunjhunwala bought up more shares in the company. (CMP: Rs225, up 4.48% as on September 27th, 2011).

Other companies that shined the moment Rakesh Jhunjhunwala placed his bet on them are:-

1. Karur Vysya Bank (CMP: Rs363.25, down 0.91%).

2. Crisil (CMP: Rs8,275, up 0.90%).

3. Hindustan Oil Exploration (CMP: Rs111.60, up 4.15%).

4. Agro Tech Foods (CMP: Rs407.50, up 0.98%).

5. Kajaria Ceramics (CMP: Rs118, down 0.21%).

6. Provogue (CMP: Rs30.60, up 3.20%).

7. Rallis India (CMP: Rs177.55, up 5.43%).

8. Strides Arcolab (CMP: Rs340, up 1.21%).

9. Viceroy Hotels (CMP: Rs25, up 4.38%).

Flashback in Jhunjhunwala Times

Mr. Jhunjhunwala started investing with Rs5000 in 1985 when the BSE Sensex was at 150. He made his first big profit of Rs0.5 million in 1986 when he sold 5,000 shares of Tata Tea at a price of Rs143 which he had purchased for Rs43 a share just 3 months before.

After 1986, the market went into a big depression for two-three years but Jhunjhunwala put his money in Tata Power and the Tata Power stocks which rose drastically. His first major successful bet was the iron ore mining company Sesa Goa.

Sesa Goa had a big fall because there was a depression in the iron ore industry and then prices for the next year had been considerably raised about 20-25%. The stock was available abysmally cheap around Rs25-26. There was a projection of a very good growth in profitability in the next year but nobody seemed to believe it. When he saw the facts, Rakesh wanted to invest but he did not have capital. So he bought 4 lakh shares of Sesa Goa in forward trading, worth Rs1 crore and sold about 2-2.5 lakh shares at Rs60-65 and another 1 lakh at Rs150-175. The prices then went up to Rs2200 and then he sold a few more shares.

cia Sharekhan