Radhakishan Damani – Mr. White ‘n’ White

Radhakishan Shivkishanji Damani came from modest beginnings and was raised in a single room apartment in a tenement block in Mumbai where he was born in January 1954 to an Indian Marwari family.

Dropped Out Of University

The Indian billionaire doesn’t consider himself as a highly educated person but that never stopped him from making it big. He pursued BCom from the University of Mumbai but dropped out during his sophomore year to try his hands at a ball bearings venture.

His father, Shivkishanji Damani, and brother, Gopikishan Damani, worked on Dalal Street but the stock market business didn’t interest the young entrepreneur at the time. RK Damani thus didn’t join it until an uncle, whom Damani looked up to, is said to have persuaded him to make the transition after his father’s untimely death.

The Cobra Strikes

This was the decade of the 1980s and Dalal Street was ruled by the dreaded market operator, Manu Manek. The Cobra, as he was known by rivals, would go about ruthlessly shorting the high-priced stocks that the bullish traders had bet upon. Subsequently, when these bulls pulled out of the investment due to insurmountable losses, the Cobra would strike and reap the profits on his short positions.

Young Radhakishan would stand at the farther end of the chaotic trading ring and observe the Cobra doing what he did best. After learning the crafts of the trade, Damani initially brokered a few deals but soon realized that investing one’s own money in this business was key. He thus made his first market investment in 1986 at the age of 32.

Shorting Stocks

The Indian billionaire was a no-one at this time and only gained a foothold in the business after overpowering his bête noire, the big bull Harshad Mehta by employing the strategies he learned from the Cobra. This was the year 1992 and short-selling stocks that were inflated by illegal means by Mehta netted Damani huge profits.

The equity king of India would have never shifted to long-term value investing if he hadn’t met the legendary first-generation value investor, Chandrakant Sampat, who guided him towards it. Damani still considers Sampat to be his greatest influence and mentor. Subsequently, Radhakishan started investing heavily in multinational stocks such as those of Nestle, Colgate, and HUL. Eventually, he became one of the country’s leading stock investors.

Carrying Out Market Research

Not much of a reader, the stock market genius did most of his market research himself and gauged market sentiment by consulting different industry leaders. RD was even able to expertly predict the dot-com bubble burst of 2000 and the stock market collapse of 2008.

As of today, the tycoon investor’s stock portfolio, which he manages through his investment firm, Bright Star Investments Limited, is worth approximately USD 10.05 billion and includes stakes in companies such as Avenue Supermarts, India Cements, VST Industries, United Breweries, and Blue Dart Express Ltd. The Indian billionaire is also known to mentor the billionaire investor Rakesh Jhunjhunwala, who is regarded as the “Warren Buffet of India“, in the arts of stock trading.

Apna Bazaar Franchise

The king of Dalal Street’s reign ended in 2000 when he quit the stock market and decided to test his entrepreneurial skills by starting a retail venture. The previous year, in 1999, Damani had operated a franchise of Apna Bazaar, a cooperative departmental store, in Nerul but was unimpressed by its business model.

Thus, the former stockbroker established Avenue Supermarts in 2002 with an aim to provide knockdown prices on basic home utility and personal products in multistory hypermarkets on India’s urban fringes.

Damani started scouting locations for his new hypermarket chain in Mumbai and Gujrat, the former of which was selected to open the country’s first DMart store. It initially saw slow growth but from 2010 onwards, the retail chain witnessed immeasurable success due to its price competitiveness. The Indian billionaire took advantage of the situation and quickly scaled up the operations.

The IPO Offering

The retail king took his chain of stores public in 2017 by offering its IPO, under the name of the parent company, Avenue Supermarts Ltd. After a record opening on the National Stock Exchange, the company’s stock closed with a staggering market capitalization of INR 39,988 crore which made it the 65th most valuable Indian firm.

At this time, Damani showed what could have been said, one of the greatest gestures of friendships ever. He offered shares of Avenue Supermarts to several of his friends at par value, Rs 10 per share, as a way to thank them for their continual help and support.

As of today, DMart is one of the most profitable food and grocery retail chains in India with annual revenues of more than INR 24,930 crore. Its operations span 72 Indian cities across 11 states including Maharashtra, National Capital Region, Tamil Nadu, Karnataka, Andhra Pradesh, Telangana, Gujarat, Madhya Pradesh, Chhattisgarh, Rajasthan, Uttar Pradesh, Daman, and Punjab. 214 DMart stores have been established so far where more than 50,000 people are employed.

Property Portfolio

Recently, RK Damani was seen adding the INR 134 crore worth 5 floors in Nariman point to his property portfolio, a range of investments that also includes the 156-room Radisson Blu Resort in Alibag, a popular beachfront getaway close to Mumbai.

While the outbreak of the Coronavirus had cancerous effects on the global economy, the Indian billionaire managed to increase his wealth by 41 percent over the year. This was primarily due to the increased demand for DMart stock and a series of intelligent investments that he carried out, such as when Damani bought a 15% stake in India cements in May 2020 taking his investment in the cement making company to 19.89%.

$18 Billion Fortune

The $18 billion fortune never changed the 67-year-old retail and equity king of India who still lives a very simple life away from the spotlight, rarely giving any interviews to the media, and staying away from market-related events.

What the public does know about the fourth richest man of India, however, is that he is a strict vegan, takes a holy river dip every Kumbh season, loves to eat paan (a preparation combining betel leaf with areca nut), and is always seen wearing a white shirt and white trousers. The fashion choice gave him the nickname, Mr. White ‘n’ White. The Indian billionaire says, “it’s one less decision to make every morning.”

My Thoughts

You will need to build up a substantial amount of capital or have a source of passive income before following the investors route.

Investments can go up and down, there is always a risk involved. There is no such thing as a safe investment. Some investments carry a higher risk than others.

You must carry out intensive research before investing your hard earned money. If you are able to make more profitable investments than losses, you will end up winning the investment game.

In life you need to take risks, but make sure that you understand the risk fully. The greater the reward the higher the risk involved.

Short-term investments offering high returns usually carry a huge amount of risk. Start your investment journey with a small amount of capital and go with low risk investments until you have honed your skills as an investor.

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