Even as the beleaguered king of good times Vijay Mallya’s company Kingfisher airlines went bust, ace investor Rakesh Jhunjhunwala made 15 times returns in a short span of 3 years by investing in the liquor baron promoted United Breweries and United Spirits.
Interestingly, Rakesh Jhunjhunwala invested Rs 6 crore in the companies way back in 1999.
If I had held those shares today the value of that investment today would be Rs 2,000 crore.
-the big bull of Dalal Street Rakesh Jhunjhunwala said at a Global Summit held on Thursday.
Rakesh Jhunjhunwala revealed that he had invested into the companies despite people telling him that Vijay Mallya is a ‘thief,’ and his companies haven’t earned any money. Explaining the importance of buying the stock at the right price, Rakesh Jhunjhunwala said that he had bought 55% of United Spirits and United Breweries for Rs 6 crore in 1999. “I thought I am getting 55% of India’s liquor industry at a valuation of Rs 100 crore that means the entire liquor industry in India was being valued at Rs 200 crore,” Rakesh Jhunjhunwala explained, adding that he felt ridiculous and made at least 15 times the original money invested in three years time.
Explaining the investing is all about patience conviction and luck, Rakesh Jhunjhunwala said that he invested in the shares of truck major Escorts Ltd when the shares were trading at Rs 125. For a considerable period of two years, the stock prices didn’t move.”I bought the shares at Rs 125 and today the price is Rs 850. But for two, two and a half agonizing years, because I was the only buyer and everybody would say what are you buying, what are you buying,” Rakesh Jhunjhunwala said.
Sharing his view on the introduction of long-term capital gains tax on equities, Rakesh Jhunjhunwala said that he doesn’t expect domestic inflows into stock markets to get affected, as stocks provide competitive returns even after the move.
It’s not going to deter at least serious local money. It could deter foreign flows a lot of them are not used to paying taxes.
-Rakesh Jhunjhunwala said at the event.