The Reclusive Investor- Story of Mr Radhakishan Damani
Updated: Jul 16, 2021
Well, to get started I will first give some stats of a person who you might not even be aware of :
Education: 12th Pass Net Worth: $9.3Bn(its billion with a big B) Or ₹62,310 Cr or ₹62310,00,00,000 /-
He is richer than Sunil Mittal of Airtel, Bajaj Family, Subhash Chandra of Essel Group, Ajay Piramal, Burmans of Dabur etc
A few days back, while talking to one of my friends who trade in the stock, I asked him if he has heard of the name Radha Kishan Damani. Since he was in the market for quite some time, I was surprised for him to say ‘No’. I assume that might be the case of most of you. Then I asked if he knows of D-Mart or Avenue Supermarkets. This time it was a Yes. I was glad to hear that.
That drove me to write this article to share the story of Radha Kishan Damani with you from whatever information I have about him.
Mr White & White
The reason very few people know about him is that he hasn’t given any interview till date, no books about him, very few articles(that too mostly after his company got listed into Indian bourses). Even after having a Net worth of $ 9bn+, we still don’t have his Wikipedia page(Sad) (For your reference, I will be using the short form RK for his name). Also, known as Mr. White & white as he is always dressed in a white shirt and a white trouser.
RK was born in a stockbroking family but he ventured into auto ancillary trading business. Due to the sudden death of his father, he shut down that business(which probably wasn’t doing good) and joined his family business. He was 32 then.
He started with trading in the market. Learned by first observing and then getting into the trading ring.
RK is well known in his battle of Bull Vs Bear with Harshad Mehta in 1992. It started when Harshad Mehta was continuously buying certain selected stocks taking the share price over the roof every day while RK was short selling those stocks. RK was convinced that the share price is being artificially inflated and have to come down but the supply of money to Harshad Mehta was unending. RK was losing money on a daily basis and finally, it was an article by Sucheta Dalal in TOI that exposed the entire scam leading to the debacle of Harshad Mehta stock which made RK a lot of money. More about Sucheta Dalal. It is said that RK was at the brink of bankruptcy at the time the expose’ came.
The second phase and the important one came he started investing.
Few years post the Harshad mehta scam, he was inspired by Mr Chandrakant Sampat, a well known value investor, RK took the leap towards investing for long term. He invested primarily in MNC FMCG companies like Gillete, Colgate, Nestle, HUL which again created lot of wealth for him.
RK repeated the feat in the 2000-01 Ketan Parekh scam where again he emerged as the winner.
Rakesh Jhunjhunwala who is also a billionaire investor & trader(Net Worth- $3.2Bn or ₹21,400cr) considers RK as his guru. Rakesh Jhunjhunwala attributes his success to trading which is learnt from RK.
This is the only video I have been able to find where we can get a brief glimpse of RK.
RK created his initial corpus by trading. Still now he trades and maintains a core investment portfolio. I personally believe making money by trading is far more difficult than doing it by investing.
The third phase was the most adventurous and rewarding.
His ambition was to do bigger. While studying the richest list, he observed that retail is the dominant sector in that list.
Motivated by that, he ventured into retail by taking the franchise of Apna Bazaar to learn how can he make the business more efficient. I would totally align with his philosophy of first learning the tips & tricks of the business and then take the leap.
At the time he left the market, his net worth was $1.5Bn, still a very big amount.
While retail chains including Big Bazaar is still struggling, he created one of the most of the most successful and profitable retail chain ever.
Post starting D Mart, the initial growth in the number of stores was very little. He wanted the full proof business model before rapid expansion.
So, what makes D Mart so special: 1. Most of the stores are self-owned, thus cutting on the rent cost 2. Stores are located in the residential or close to residential area targeting middle-class working population 3. Limited no. of SKU– While other stores are interested in enhancing the number of products, Dmart provides the most essential ones only such as food & grocery. 4. Buying in bulk and paying quickly to get a higher discount from the supplier 5. Motto- EveryDayLowCost(EDLC) & EveryDayLowPrice(EDLP) 6. No private labels products, No e-commerce, No loyalty programs or social media strategies. When everyone else is doing this, you need to have the conviction and the guts to go against the herd
I believe there are 2 things to learn from Mr RK Damani 1. Learn & then take big risks 2. Use your own logic
If you have the passion and determination, you can do anything. That is what is showed by Mr Radhakishan Damani in the amazing journey.
Here is the list of the portfolio of his holding company ‘Bright Star Investments’.
Holding company in his personal name.
Please dont try to replicate his portfolio but try to learn from his personality traits.