Jobaaj Stories
The story of the founder of Dmart doesn’t start from luxury as surprising as it may be!
In fact, his journey to being a business magnate, founder, and one of India's top investors, started from a small single-room apartment in Mumbai.
After breezing through initial schooling, he pursued his graduation in commerce from the University of Mumbai. However, only after one year into his graduation, he dropped out of college and soon took up a ball-bearing business.
His father was also a stock trader so he already had an inclination toward the equity markets but it was only after the death of his father, that he gave up on his ball-bearing business and took up a job as a stockbroker.
But it wasn’t his intent to engage with the market as a broker. He wanted to be an investor, and that’s what he became!
Also read about the life story of India's big bull, Rakesh Jhunjhunwala.
Radhakishan Damani's stock market journey
As a cautious and calm-minded person, he didn’t jump into the stock market outright. In fact, the first time he invested in the market was when he was 32.
But naturally, he too faced failures in the beginning. He pursued many veteran investors in the market and considered them his mentor. Over time, he started to fine-tune his strategies and began investing in long-term stocks.
He always had a penchant for learning from the top wolfs and so he very specifically used to observe the investing strategies of Manu Manek who was, at the time, one of the most powerful chess pieces in the Indian stock market.
With a cautious attitude and a learning approach, Radhakishan Damani would have gradually become a successful investor anyway. But, he was catapulted to success even faster!
The reason?
Harshad Mehta scam!
Profiting from an event that bled the market dry
On that cursed day, when the markets dropped due to the Harshad Mehta scam, dozens of stock traders literally cried on the BSE floor.
And yet, Radhakishan Damani was one of the very few investors who had sensed what was happening and was able to cash in the opportunity. When everyone was buying the inflated stocks that Harshad Mehta kept pumping artificially, Radhakishan was busy short-selling.
He had sensed the market sentiment and had realized that the stocks that were rising rapidly were a result of inside-market manipulation. When the stock market finally crashed, his short-selling turned over the profits to him.
In fact, that was the event that catapulted his wealth exponentially!
Radhakishan Damani's Net worth
Being the founder of one of the largest companies in India, and potentially the biggest stock investor in India, it’s no surprise that Radhakishan Damani is one of the top 10 richest people in India.
As per corporate shareholdings filed in June 2022, Radhakishan Damani and his family had a 67.5% holding in Damani’s own venture Avenue Supermart(the parent company of Dmart). Avenue Supermart has a market cap of INR 2.9 trillion. That alone technically made him the owner of stakes worth around INR 1.5 trillion. (in June 2022)
Currently, his total net worth according to Bloomberg is INR 1.8 trillion, that’s around USD 22 billion!
Investing strategies of the one who profited even from a market crash
Since the very beginning, Radhakishan’s investing strategies rely on long-term commitments.
Instead of short-term stocks with low predictability, he used to pick stocks that had good fundamentals and were lowly priced.
Some of his major profits were booked by long-term investments in small-priced stocks like VST, GATI, and TCI. In fact, some of the stocks that he purchased at the price bands of Rs 50-100, are currently worth Rs 3000-4000
Not only that, but at a time, when PSU banks were flourishing, he purposefully put his money in private banks like HDFC. A decision that later proved extremely fruitful for him. As an investor, he had developed a particular penchant for understanding market sentiments.
He also firmly believed in the market’s preference for stocks whose companies were valuable to their customer. In fact, even during the coronavirus turmoil, when almost everyone saw their portfolio bleed, Radhakishan Damani’s stock portfolio remained unscathed.
Traversing the entrepreneurial path
After having invested in the market for a while, in 1999, he operated a franchise of Apna Bazaar. However, pretty soon, he was convinced that it wasn’t a good business model.
It was then that he began setting up the roots of an entity that is now one of the largest companies listed on the Indian stock market. Interestingly, around this time, when Radhakishan Damani was at the peak of his investing journey, he suddenly quit stock market trading and shifted all his energies toward his business venture.
Dmart began in 2002. A happy coincidence for Radhakishan Damani because around the same time, real-estate prices had fallen down significantly and so, he acquired properties for Dmart.
His strategy with Dmart was pretty straightforward. Focus on profitability instead of expansion. In fact, when other brands in the same industry were utilizing malls to open their stores, Dmart focused on opening its own stores on its own property.
Starting out in 2002, Dmart only opened 25 stores till 2011! His philosophy of sustainable profitability before expansion worked magnificently in that time and age. And then in 2017, Dmart brought out its IPO, making Radhakishan Damani the retail king of India!
You should also know, that currently, Dmart has a total of 294 stores! With total revenue in FY22 of around 30,000 crores in INR!
Radhakishan Damani's Portfolio holdings
Apart from a magnificently successful businessman, Radhakishan Damani still remains to be an unbeatable investor.
According to Trendlyne, Radhakishan Damani currently holds a stock portfolio comprising 16 stocks, with a total portfolio worth Rs 200,306 crores.
Here’s a brief analysis of all his current stock holdings: (data sourced from ticker)
Naturally, a large part of his portfolio is titled towards his own founded venture, Avenue Supermart, as you can see, Radhakishan Damani holds 75% of Avenue Supermart(parent of Dmart). That alone brings a worth of INR 2 lakh crores to his portfolio.
Although Radhakishan Damani has had numerous achievements and has built a huge empire, a part of his success could be credited to his dedication and drive which he showed during his initial investing journey. In fact, his investing strategies which made him successful back then in the 1990s, are still very relevant.
Thanks for reading!
This blog resource is brought to you in association with Jobaaj.com
