This man turned his 5,000 INR into 6,000 Crore INR by trading stocks
Are you interested in trading or willing to take up trading as a profession? Then this article can be a real inspiration for many aspiring traders of the country. Today, we will share with you the story of an Indian trader who started with just 5,000 INR and turned it into 6,000 Crore INR. This legendary investor is often referred to as Warren Buffet of India. This is the story of Rakesh Jhunjhunwala.
How it all started
Rakesh Jhunjhunwala was born in a middle class family on 5th July 1960. His father was an officer in the Income Tax Department and took immense interest on stocks. One day Rakesh asked his father why the prices of the stocks fluctuate. In response, he told Rakesh to check if there is a news item on Gwalior Rayon in the newspaper, and if there is any news Gwalior Rayon’s price would fluctuate the next day. Young Rakesh found it very interesting and got fascinated by stocks. This was the first lesson on stock market which Rakesh Jhunjhunwala received. He decided to take up trading as a profession and told his father about his wish. Rakesh’s father advised him to become professionally qualified to fulfil his wish. Rakesh then took up Chartered Accountancy and completed his CA in 1985.
First Success in Trading
After completing CA, Rakesh started his career as a trading professional in 1985. The BSE Sensex was at 150 then. Rakesh saw first big success in the following year after he bought 5,000 shares of Tata Tea at a price of Rs. 43. After 3 months of the purchase he sold all those shares when the price touched Rs. 143. He made Rs. 5 lakhs which was a huge amount at that time.
Second major success in Trading
After 1986, the stock market went into a big depression which lasted till 1989. During that period Rakesh Jhunjhunwala earned around Rs. 20-25 lakhs. Sesa Goa had a big fall at that time 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 Rs. 25-26. There was a projection of a very good growth in profitability in the next year but nobody seemed to believe it. Rakesh saw these facts and wanted to invest but he was short of enough capital. To make up for the short capital, he purchased stocks of Tata Power. He sold off all the stocks of Tata Power when it was trading between Rs. 1100-1200. He was able to make around Rs. 50-55 lakhs from the trading. Rakesh then purchased 4 lakhs shares of Sesa Goa worth Rs. 1 crore in forward trading. Rakesh sold about 2-2.5 lakh shares at Rs 60-65 and another 1 lakh at Rs 150-175. The prices then went further up and he sold the remaining shares.
Once in an interview Rakesh Jhunjhunwla said, “I had no capital when I came to the markets, and no father gifts and no father-in-law gifts. So I had to earn the capital to invest. How do you invest if you don’t have the capital? And I got the capital by doing future trading.”
“Passionate investors always make money in stock markets. You will never fail in any work if you do it with passion” – Rakesh Jhunjhunwala..