Rakesh at 50.....

Considered to be the greatest investor in the Indian market, Rakesh Jhunjhunwala, on his fifty birthday, admits that "age" hasn't mellowed him down nor has it stopped him from being a ladies' man. In an exclusive interview with CNBC-TV18’s Managing Editor Udayan Mukherjee, Jhunjhunwala sheds light his journey so far and what lies ahead.

Of course, this Warren Buffet of India's mind is dominated by stocks and their performance. While there are several stocks with which Jhunjhunwala is emotionally attached to, there are still some which generate a reasonable degree of annoyance.

Here is a verbatim transcript of the exclusive interview with Rakesh Jhunjhunwala on CNBC-TV18. Also watch the accompanying video.
Rajesh Jhunjhunwala, Brother: Rakesh is baby of the family. He was a sweet, little, chubby boy who was very intelligent. The greatest quality, I think, he has is when he made money, more than himself he wanted to do for the family. Since we were from a middle-class background, air-conditioners were a far dream for us and I remember when we got air-conditioners, we had it in all our three rooms that is mummy’s, mine and then Rakesh’s.


Q: Are you a family man? Would you describe yourself as a family man or that would not be an appropriate discussion?


A: I don’t know how you describe a family man. But I can tell you one thing, nothing is more important to me than my children and there is no woman I can ever love in my life other than Rekha Jhunjhunwala (wife), come what may.


Rekha Jhunjhunwala, Wife: I know he loves me the most.
Q: What do you see your children growing up as, what would you like to see them grow up as?


A: I would like them to grow with two-three things, have their mother’s nature, my brains, integrity, responsibility, education. The modern world is all about human rights and human choice, so I want to give them the choice to be what they want to be. I want to give them the freedom to be what they want to be. I don’t want them to be fund managers and I don’t think that earning wealth is necessarily the pleasure of every human.
Q: The legacy of wealth will not interfere with their ambitions or the way they turn out to be, you think?
A: They will have their own ambitions and they will turn out the way they are. I don’t know how they will turn out, but I don’t want them necessarily to be investors or people whose professions lead to earning of large wealth. So they could be doctors, they could be lawyers, they could be chartered accountant, whatever they want to do in their life. I want to respect their personal choice whether in terms of career, whether in terms of marriage, whatever.
Q: Are they closer to you or Rekha?

A: Before the age of two, they will surely be closer to their mother. Nishtha, daughter is a daughter, she is my princess.

Nishtha Jhunjhunwala, Daughter: I am papa’s princess. I want my papa to become a king and mamma should be the queen.
Q: Do you cherish the company of your friends or are all your friends largely from the stock market?
A: My friends are largely from the stock market, but that doesn’t mean that our conversation starts and ends with the stock market.
Amit Goela, Rare Enterprises: I was going to Kolkata for my wedding. The night before I was supposed to leave, me, Rakeshji and another friend of ours, we had an all night drinking session. Between him and me, we finished one and a half liter bottle.
Lashit Sanghvi, Alchemy Share & Stock Brokers: It (our relationship) started with more as a client kind of a thing. But over a period of years, he became more like a friend, philosopher, guide, and mentor to me.
"All my friends are independent thinkers. Nobody is no-one’s ‘chamacha’, so the discussion is always very lively."
Q: And you have the humility to accept another point of view, it is because you may think that I am richer, more successful, therefore I am right and they are wrong.
A: Never. I always believe that all phases in life are transient and temporary. I may have some qualities, which are not desirable, they are not here because I am rich or because I am successful, and they are here because I was born with them.
Sudha Gupta, Sister: He is the baby of our family. He was very stubborn; always he did what he wanted to do.
“Time has humbled me. You have got to respect and appreciate other person’s point of view. If I speak loudly, it is not that I want to put the other person down but that is the way I am. That is the passion with which I speak,” Jhunjhunwala says.
Utpal Sheth, Rare Enterprises: There was a certain passion and enthusiasm that I could see in his eyes, in his mannerisms which showed how much he loved what he did and how much he did what he loved.
“In fact you will see some of the big fights. It is unbelievable. I can’t believe myself,” Jhunjhunwala adds.
Q: Did you ever think when you started of that you would achieve what you set out to achieve?

A: Not really. But I have learnt in life when you start you see a horizon, you feel out diffident, difficult and distant it is but when you come to that horizon you realise how many more there are.

Rajesh Jhunjhunwala, Brother: There is a very important part when he did his CA we asked him to join, during practice he said you are practicing CA. You are use to doing sewa of other people and daddy is in the income tax department he is used to getting sewa done. I do not want to do that. I want to see that 30 chartered accountants work for me I want to become an industrialist.
Radhakishan Damani, Friend, Philosopher and Guide: We use to take risk but they were calculated risks. He always use to take calculated risk. The discipline was there from day one.
"We have built lives from step, to step and always with mitigated risk. Where time will take you nobody knows," Jhunjhunwala says.
Q: Who do you count among your mentors in the market?
A: Mentor is only one Radhakrishnan Damani.
Q: Had he had such a influence on your?
A: You do not know how close we are. And we trade separately; we have no partnerships, nothing.
Q: Give me a couple of instances because you mentioning his name—have there been specific instances in the past where he has shaped your investments style or you have looked up to him for advice—why do you consider him a mentor?
A: Because primarily I have learnt trading from him.
Q: Trading or investing.
A: Trading. I primarily realized that more than intelligence he has wisdom. Third he does not teach you have to learn. Fourth he has extreme patience and humanity.
Radhakishan Damani: He gives so much respect to me that he puts me in an embarrassing situation so many times.
“It is like a relationship very difficult to define. I do not know without my father and him I do not know where I would be. He has really taught me in life and more than that human nature. He has taught there is nothing greater in life than parents, to react coolly to everything and not to be afraid of anything, not that I am. When I met him he was an extremely rich man, I was not a rich man. Today, I do not know who has more wealth. But our relationship has never changed, it is always the same. And the patience is he has to hear other person’s point of view is unbelievable,” Jhunjhunwala says.
Q: When you first met him were you a young trader?

: I never use to trade that time, it was 1987-1988 and I just met him on the street of Bombay Stock Exchange and I was bullish on Tata Power and nobody would listen to me and I would go on explaining to him and he would keep listening.



Radhakishnan Damani: Even that time he knew what he wants to do. It was a very good conviction in himself. He knew the stock market investing is going to be a big thing in India.
Q: Any one else who comes to mind who is or maybe not in his league in terms of having shaped your opinions or your style?
A: I think Kamal Babu, Ramesh Damani and Kamal Kabra. Ramesh especially opened a lot of horizons for international matters—in terms of dealing and though process.
Q: Who do you have respect for, as a contemporary, in terms of an investor in the market not a mentor or who you learn from but the people who see around you?
A: I have respect for Radhakishanji. I have respect for Nimesh Shah. I do not think there is a better analyst of the Indian stock market. There is not and there will not be, whether it is rain, whether motorcycle dispatches it is all in Nimesh’s fingers.
Q: Every time I talk to you about markets, you say markets and women, are you a ladies man?
A: Are you not? Yes, I am a ladies man, who doesn’t like to talk to ladies.
Q: Who is your favourite Bollywood heroine?
A: My favourite Bollywood heroine was Waheeda Rehman.
Q: Of the current lot because you keep telling me that you go for dinners with Preity Zinta then you go for interactions with Priyanka Chopra. So you have met all of them at a personal level.
A: I have not met all of them. This generation is not something in which I have many favourites.
Q: That is a lie. I know it. There is no conviction when you say it. You have your favourites, why don’t you say it?
A: Personality-wise I like Sushmita Sen very much.
Q: Who do you consider hot?

A: Sushmita Sen.Q: I want to come back to your portfolio, since we are talking 50 years, what is the best stock you have ever owned, your all time favourite stock?

A: Titan, I wear it on my hand.

Q: Just because it has made you money? There is no other emotional attachment to any other stock?
A: Look at the company.
Q: It has done superbly, phenomenally well; I thought it might be a close contest with Lupin, which is another stock, which has made you a lot of money?
A: No, I think a stock in which I have emotions is in Karur Vysya Bank.
Q: Why? What is the story?
A: Look at the sheer performance. There is 21% compounded growth in profits for the last ten years, comes from a place nobody knows called Karur. It is not a small bank now, its profitability is about USD 90 million, growing at 20-25% and I own it since 1992-1993-94.
Q: You haven’t sold anything?
A: No, I haven’t sold. I think this investment has given me I don’t know how much thousand percent return.
Q: What is the worst investment you have ever made, something you regret, the thought that just irritates you, why you bought such stock?
A: I have written off at least USD 20 million in my private equity investments.
Q: That is unlisted companies.
A: Yes, unlisted companies.
Q: In the listed space, one stock which really makes you angry that you bought that?
A: Infomedia18. I sold it just about six months back. But if you look at the stats, special interest publication magazine with a market in America, leadership in yellow pages and I held the stock for at least for seven-eight years.
Q: Eight years?
A: May be seven-eight years and then I sold it, maybe with some loss. Though I think good industry, good positioning, but I never made money.
Q: You bought VIP recently, what attracted you to that story?
A: It is a no-brainer in terms of growth. In travel, it dominates. I started buying it at Rs 65.
Q: You met the management?

A: No, I met Dilip Piramal socially so many times, I still meet him socially sometime but I have never been to his office and met him. My average cost would not be more than Rs 120 or maybe less. So, it is a no-brainer, according to me.

Q: What do you think of banks? You have never spoken about that, it is a big industry, you have spoken once or twice about State Bank to me in the past, are you bullish or bearish, because it seems like the bellwether in the system right now?
A: I was very bullish on State Bank, but now I am negative on the stock because I don’t like a bank who cannot provide for its bad debts. They are under providing every quarter and they need time from RBI to make 70% provision. But one thing they may have upside and uprun now, but over a medium time period all of them will need capital, which is one thing, which will dilute returns.
If you look at HDFC and other banks, as their size goes up, their cost to income ratio goes down. But State Bank remains constant. So they don’t get any benefit of scale.
Q: You were speaking about government policy, I remember you telling me about IOC some one-and-a-half years back, were you holding it from then, did it work out finally?
A: I was holding some shares but I have sold it. I did not make much money, and I made money after this decontrol. But this was inevitable, it has to happen.
Q: But you are out of it now?
A: I am out of it.
Q: You made your money and you left, you don’t think there is huge upside which has opened up after what the government did?
A: Essentially, the oil marketing companies were being paid entirely by the government. Only the payments were delayed, there was uncertainty and there was liquidity problem. But that is what will be solved, it’s not that the profit will go up. But because of the fact that it was an imperfect market, the value of their marketing networks are not being recognised. So now that will be recognised.
Since I have sold it, I have not done much analysis.
Q: Since you have invested in so many companies, you know so many companies, who is the industrialist who you think has done very well?

A: The individual I respect Bhaskar Bhat of Titan.

Q: That because you own the stock.
A: No.
Q: Other big business heads.
A: Adi Godrej.
Q: Why do you like him?
A: I like him because of his transparency, return on capital, and for sharing wealth with people. Hats off to him!
Q: But you do not own his stocks, do you?
A: I don’t but that doesn’t mean I don’t respect him.
Q: You like him?
A: He has done exceedingly well. Unfortunately, I bought Geometric instead of Godrej Consumer.
Q: I know Geometric is in your portfolio, you never bought any other Godrej stocks?
A: No.
Q: What is your most memorable family moment?
A: My parents’ fifty wedding anniversary.
Q: When was that?
A: That was in 2002, February 14. I booked a suite for my parents and my father said why to waste money and next day when they came back, the way they were flushed, I was so happy.
Q: Were they proud of your wealth? Your father was a middle-class man and didn’t you have a middle-class upbringing.
A: My father was a middle-class man. He had a house in Mumbai and used to receive a good pension. He had some capital and was a man of modest needs, so he never needed my wealth. He was proud of the achievements, and the fact that because we became rich or successful, we didn’t forget our parents. A lot of people asked me whether my father lives with me. I used to say that I live with my parents.
When I gave him the Forbes list, he was surprised. He always cautioned me against getting arrogant or taking it for granted. But seeing your parents, children feel happy. What is it that you can give your parents? They don’t need your wealth and there is not much time. My father is no more, but I live with my mother.
Q: Do you miss him?
A: I truly miss him. If he was here today and had seen my two sons, it would have made his life. That is my biggest sorrow and my biggest happiness is they are my mother’s lifeline today. She cannot do without them and they cannot do without her.