From Borrowing 500 RMB to Enter the Market to a Net Worth of 39.2 Billion: The Trading Philosophy of "India’s Buffett," Rakesh Jhunjhunwala

When people talk about stock market gurus, they often think of Warren Buffett and Wall Street tycoons. Today, we introduce an Indian stock market legend named Rakesh Jhunjhunwala. Starting with just 5,000 rupees (about 500 RMB), he amassed a fortune of 5.8 billion USD (about 39.2 billion RMB) in the stock market, earning him the nickname "India’s Buffett."
Jhunjhunwala was practically self-made. Although his wealth might only be a fraction of Buffett’s, his legendary status is no less impressive.

Like Buffett, Jhunjhunwala was influenced by his father from a young age. His father was an income tax commissioner in Mumbai and an insider in the financial world.

He recalled that as a child, his father often discussed the stock market with friends over drinks. He would eavesdrop on their conversations, which sparked his fascination with stocks.

Jhunjhunwala’s father encouraged him to read newspapers and observe market fluctuations but refused to fund his investments.

The First Trade of His Life
At 25, Jhunjhunwala borrowed 5,000 rupees (about 100 USD) from his cousin to make his first trade. He bought shares of Tata Tea Ltd., a century-old company under the Tata Group, at 45 rupees per share and sold them six months later at 140 rupees.

Later, recognizing the immense growth potential in Indians’ ubiquitous tea-drinking culture, he repurchased Tata Tea at 150 rupees. Five years later, he sold the shares at 1,200 rupees.

Reflecting on this, he said the Tata Group was a century-old Indian institution, and Indians had an ingrained tea-drinking habit, making Tata Tea a safe investment.

The First Million Rupees of His Life
In the early 1990s, India’s economy was in crisis, with foreign exchange reserves shrinking to cover just two weeks of imports.

While analysts predicted a bear market and exited, Jhunjhunwala did the opposite. He believed global economic growth would increase demand for natural resources like iron ore, and India, with the world’s third-largest iron ore reserves, was a treasure trove.

He boldly bought shares of iron ore exporter Sesa Goa. The market then skyrocketed, earning him his first million rupees.

The Most Perfect Trade of His Life
His most flawless trade was investing in Titan Company, a jewelry brand. In 2002-03, he bought Titan shares at an average price of 4.5 rupees per share.

When Titan’s stock rose to 80 rupees and then dropped to 30, most would have cut their losses. But Jhunjhunwala doubled down at 30 rupees, and eventually, the stock soared to 400 rupees—a 100-fold return.

Twenty years later, the stock trades at 2,500 rupees per share, an 833-fold increase.

Look Beyond Profits
Jhunjhunwala is called "India’s Buffett" partly because he, too, is a value investor. He focuses on a company’s profit model, growth potential, and vitality, believing competitiveness, scale, and management quality are paramount.

"Opportunities always come with technology, marketing, branding, value protection, capital, etc. You must discern and seize them," he said. He cited Infosys, India’s IT giant that benefited from the internet revolution. "In 1993, no one knew Infosys. Its rise was fueled by the internet boom."

He advised investors not to chase profits blindly but to understand what drives them. "Don’t overanalyze profits. They’re outcomes of varying circumstances. I focus on a company’s growth potential in its industry."

After understanding profit drivers, Jhunjhunwala evaluates a company’s scalability. "Some ask whether to invest in small or large caps. I say invest in small companies that can become large caps. The biggest challenge is discerning scalability." He believes a company worth investing in can replicate its successful model elsewhere, indicating growth potential.

In an interview, Jhunjhunwala shared his skepticism about India’s real estate sector, avoiding it entirely. He also finds tech stocks mature. Bearish on the USD, he holds commodity-related investments, particularly in oil, and favors retail, banking, infrastructure, and pharmaceuticals.

Buy and Hold
Jhunjhunwala’s success stems from accurately predicting India’s long-term economic and market trends. In the 1980s, India’s economic liberalization and reforms spurred 5.6% annual GDP growth and private sector expansion, revealing opportunities. He adhered to a "buy and hold" strategy, emphasizing patience and conviction. "With both, you’ll reap rewards as your patience is tested."

During the tech bubble, he favored stable companies over high-flying tech stocks, enduring ridicule when peers’ stocks rose 20% daily while his gained just 2 rupees. His secret? "Persistence." He never wavered due to short-term market shifts.

Though a value investor, Jhunjhunwala also used technical analysis, believing "the trend is your best friend." He was both an investor and trader. "Trading aids my investing. I use technical analysis extensively." He saw short-term trading and long-term investing as distinct but complementary.

In his portfolio, 3%-5% was actively traded. "I buy and sell, but never in large quantities." For selling, he ignored target prices, instead exiting when earnings peaked or valuations became irrational.

Rakesh Jhunjhunwala’s Two Keys to Success
His success boils down to two principles:

1. Focus on intrinsic value (profit model, growth potential, and vitality).

2. Assess a company’s growth opportunity within its industry and future demand potential.