Radhakishan Damani Portfolio

The year was 1992. Indian share markets were going through a phase which could only be termed as a pretty bad nightmare. The Bombay Stock Exchange (BSE) had the biggest fall in its history.

In case you haven't guessed it yet, we're talking about the Harshad Mehta scam! The Indian stock markets had a pretty rough time following the details of the scam breaking out.

Investors all around India were worried and disappointed. However, there was one particular segment where investors were laughing all the way to the bank - the short sellers. Among the short sellers was one prominent name Radhakishan Damani.

Several years after the scam, he reportedly said this to his friends "Agar Harshad saat din aur apni position hold kar leta, toh mujhe kathora leke road par utarna padta." (Had Harshad held his position for seven more days, I'd be on the streets with a bowl in my hand).

Back in 1992, Harshad Mehta inflated the price of many stocks by creating artificial demand. On the other hand, Radhakishan Damani was a keen follower of Manu Manek - a popular short seller of the 90s.

During his initial years in the stock market, we could say that the Indian market was somehow influenced by Manu Manek, popularly known as the Cobra. Damani learned his shorting techniques and later used the same techniques to pull one over Harshad Mehta.

Radhakishan Damani wasn't an investor at heart neither did he stay just an investor. He dropped out of college to start a ball bearing business. His brother and father were stock brokers.

After his father's untimely device, Damani was forced to joined the stock market and that is how his journey started as an investor.

After earning fame as an investor, he went back to his real interests - starting a business. In 2002, he started a retail chain of supermarkets under the name 'Dmart'. The company was registered as Avenue Supermarts.

He started with one store in Powai and today Dmart has more than 300 stores in India. No wonder he is knowns as the retail king of India.

Apart from being an ace investor and a successful businessman, he was also the mentor of the big bull Rakesh Jhunjhunwala.

At a public event in 2020, Jhunjhunwala said he learnt a lot from Damani, including the latter's conviction in India as a bull market, apart from lessons in investing and trading.

He said "I can't list down what I have learnt from him, I can list down what I have not learnt".

Radhakishan Damani's investment style

Damani has often said in interviews that he is greatly inspired by the legendary value investor Chandrakant Sampat, whom he had met in the early-90s.

For those who are not aware, Sampat started investing in stocks in the early-70s, practiced the art of value investing and made a fortune. He passed away in 2015.

According to a broker who dealt for Damani, Damani kept two different portfolios. He kept a core and trading portfolio. He dabbled with F&O only in his trading portfolio. His holding time in core portfolio is usually 5 - 7 years.

Safe to say that he had a good grip at both, long term investing and short term investing.

Have you ever wondered why Avenue Supermarkets became one of the most successful retail chain in India, even though it faced tough competition from local shop owners and kiranas? It's pretty hard to break in the Indian retail market. Well, the answer to that question lies in the unique strategy adopted by Damani.

All the stores of the company are owned by Avenue Supermarts and none of them are leased. This helped the company in reducing costs and increasing its margin over the years.

Radhakishan Damani believed in investing occasionally rather than spending regularly.

He is not much of a reader as he does stock research by himself - mostly by talking to a lot of people. "Market kya lag raha hai?" is the first question he'd ask any active market participant - big or small.

Being the good listener that he is, Damani gauges market sentiment by talking to a lot of people. He doesn't share much or give his own opinion about stocks.

Radhakishan Damani stocks and his portfolio

Radhakishan Damani's prominent investments include VST Industries, HDFC, ITC, Sundaram Finance, Gillette, CRISIL, ICRA, 3M India, Blue Dart Express, and India Cements.

He is also known to have shares of multiple multinational corporation (MNCs) such as Nestle, Colgate and HUL in his portfolio.

He had acquired almost 15% stake in VST Industries in the year 2000 at an average price of Rs 80 per share. The stock has over the years zoomed to Rs 3,500 but that's not the interesting part...VST Industries is among India's best dividend stocks and pays hefty dividend to shareholders.

Likewise, reports state that Damani had advised a friend to buy Sundaram Finance at Rs 270 per share; the stock has over the years scaled a peak of Rs 2,300 per share. Another big scalp of his investment was HDFC Bank, which he started acquiring at Rs 4 billion (bn) market-cap levels.

For more details about Radhakishan Damani and his latest stock picks, check out Radhakishan Damani Portfolio and his top 5 stocks.

Investment Takeaway

Radhakishan Damani is a symbol of success. He leaves behind a trail of investment takeaways that investors can adapt to build a portfolio like him.

Here are some takeaways that investors should note -

1. Have a long term vision

   Damani had a long term view in mind which helped him gain far sightedness. He was able to predict the stock market bears in 2000 and 2008 long before the markets actually crashed.

   Having a long term vision helps investors gain a broader view of the market. To gain an overall understanding of the market, investors should a deep study of the market, industry and the company itself.

2. Value investment is the way out

   His core investment principle was value investing. Value investing involves buying fundamentally strong stocks when at their fair price and then waiting for them to churn out high returns in the long run. He also embedded the same investing style in his business, which is why he never took any land on lease.

3. Bearish markets are a good news

   For any value investor, a bear market is the perfect investment opportunity. An investor can buy his choice of stock at a price he chooses. Radhakishan Damani believes bearish markets are perfect for buying stocks and bullish markets are perfect for analysing the stocks that an investor can buy in bearish markets.

4. Do not be afraid of having a contrarian approach

   During the 1990s when many investors preferred long term trading, Damani was a short seller. He used shorting techniques, learnt from Manu Manek.

5. The magic of compounding

   Radhakishan Damani adheres to the principle of compounding to ensure an effective growth of his portfolio. The key principle to his compounding story is "start early and invest wisely".

   He said, "the market teaches us something new every day, but the one lesson that stands out is the 'importance of compounding' in a young investor's portfolio. The most important lesson learned over the course of thirty years is the significance of comprehending compounding; if you do, then you've won a significant portion of the fight for financial freedom."

Happy Investing!

Here's a list of articles and videos on Radhakishan Damani stocks. This is a great starting point for anyone who is looking to explore and learn about the stocks that he has in his portfolio.