Jhunjhunwala a name Indians watch
By Pooja Thakur
Bloomberg News Service
MUMBAI, India — On the walls of Rakesh Jhunjhunwala's penthouse office in Mumbai, line drawings of Warren Buffett and George Soros stare down at statues of Ganesh, the elephant-headed Hindu god of wisdom and success.
"India is in a sweet spot," says Jhunjhunwala, 44, a private investor whose stock picks have earned him as much as $250 million. "New investors are adding to existing investors. You have sustained earnings growth."
Jhunjhunwala's public trades are a lure for India's 40 million individual investors. The Sensitive Index climbed to a record high in March, and the value of shares traded daily in Mumbai (formerly Bombay) has risen eightfold to $1.6 billion in a decade.
In December, Jhunjhunwala bought a 5.3 percent stake in Mid-Day Multimedia Ltd., which publishes the country's best-selling English-language tabloid newspaper. The next day, shares soared 20 percent, the daily limit permitted by the exchanges.
"High-profile investors are valuable to every boom," says Vijayan Krishnamurthy, 42, who oversees $1 billion as chief executive officer of J.M. Capital Management Ltd. in Mumbai. "They attract retail investors who need a beacon to follow."
Jhunjhunwala, whose office overlooking the Arabian Sea boasts a gym, since has been invited to join Mumbai-based Mid-Day's board, according to Managing Director Tarique Ansari. Mid-Day newspaper last June named Jhunjhunwala "numero uno in terms of market influence."
"I follow his acquisitions closely," says Chirag Shah, 28, who runs an electrical-parts distribution company in Mumbai and started buying stocks six years ago. "It's a no-brainer to imitate his portfolio picks."
Not everyone is as keen on Indian stocks. Ridham Desai, Morgan Stanley's equity strategist in Mumbai, says they are expensive relative to other regional markets.
The 30-member Sensitive Index, or Sensex, is valued at 13.04 times projected earnings. By contrast, Thailand's SET index is valued at 10.12 times projected earnings, South Korea's Kospi at 9.95 and Indonesia's Jakarta Composite Index at 11.35.
Standard & Poor's is still buying in India — from Jhunjhunwala. He sold about a third of his 14.3 percent stake in Mumbai's Crisil Ltd., India's biggest credit assessor, to the New York-based ratings company on April 26.
"We've been interested in looking at this market for a long time," says S&P spokeswoman Rebecca Hill in New York. "India has emerged particularly in the last decade as an important power."
Jhunjhunwala, the largest single stakeholder in Crisil, says he first bought in January 2002 at 150 rupees a share. Standard & Poor's offered 775 rupees per share to gain control.
"What S&P is doing today is recognizing what I recognized far earlier," he says. "I thought the company would be able to cash in on India's underdeveloped markets and, as the country grew, its business would grow, too."
India's equity markets are worth $384 billion, a fourfold increase from 1995, according to data compiled by Bloomberg estimates.
