At a time when the country was under lockdown, grappling with the impact of the Covid-19 pandemic on the economy, businesses, and financial markets, the fortunes of Rakesh Jhunjhunwala continued to soar. Thus far in the current financial year 2020-21 (FY21), the net worth of Rakesh Jhunjhunwala and family has increased Rs 2,514 crore with the value of their investments once again surging past the Rs 10,000 crore mark. Based on Monday’s closing, Jhunjhunwala family’s total investments in listed companies stood at Rs 10,797 crore, up 30 per cent from the Rs 8,284 crore at March-end.
During April – June 2020 quarter (Q1FY21), Jhunjhunwala increased its stake in Rallis India, Jubilant Life Sciences, Federal Bank, NCC, and Firstsource Solutions (FSL), while trimmed his holding in Lupin and Agro Tech Foods, the latest shareholding pattern available on the exchanges show. Jhunjhunwala added Indian Hotels in his portfolio, acquired 12.5 million shares of 1.05 per cent stake in June quarter, against nil holding in the previous quarter.
His stake in Tata Group-owned watch and jewellery maker - Titan Company - and tractor-maker Escorts remained unchanged along with 11 other companies that include Orient Cement, Multi Commodity Stock Exchange of India, ION Exchange, Crisil and Fortis Healthcare. Rakesh Jhunjhunwala and wife Rekha Jhunjhunwala held more than 1 per cent stake in 29 listed companies at the end of March 2020 quarter.
Among the lot, Rallis India, Escorts, Jubilant Life Sciences, and Lupin helped Jhunjhunwala’s portfolio beat market returns at the index level since April 2020. These stocks collectively added half, or Rs 1,246 crore, of the total Rs 2,514 crore gain in Rakesh Jhunjhunwala’s portfolio during the period under review. Titan, however, underperformed the market by gaining 7 per cent. In comparison, the S&P BSE Sensex was up 26.7 per cent during the same period.
Given the sharp run in the markets since their March 2020 lows, most analysts are now cautious and suggest the trajectory will depend on the number of Covid-19 cases and the progress of the vaccine to battle the pandemic. That said, equity as an asset class, they believe, should deliver good return from a long-term horizon.
“Given the significant rally already, we believe the global equity market may remain on the sidelines over the next few months as profit booking may set in. Within equities, Indian equities could underperform their Asian peers in the next few months given the lack of a demand stimulus,” wrote Jitendra Gohil, head of India equity research at Credit Suisse Wealth Management India in a July 16 note co-authored with Premal Kamdar, their equity research analyst. They remain bullish on agri-linked, telecom, FMCG, and utility sectors.
Ajit Mishra, vice-president for research at Religare Broking, too, echoes a similar view and maintains a cautious stance on the markets given the runaway rally.
"Markets are largely focusing on the earnings and the recent announcements from the index majors have positively surprised, which in turn is fueling the recovery. Besides, the global markets are also not showing any signs of slowing down, helping the index to maintain the momentum. However, the rising Covid-19 cases and talks of community transmission could dent the pace ahead. We suggest focusing more on risk management and opting for quality counters for investment," he says.