Rakesh Jhunjhunwala lists out 5 qualities that make a multibagger

Ace investor Rakesh Jhunjhunwala says the continued gloom in the Indian stock market is unprecedented, but hoped that there will soon be light at the end of the tunnel.

“I have never seen such volatility in Indian stocks. This must be the darkest hour before dawn,” he said during an interaction with ETNOW.

“The market always gives you an opportunity to buy before going up,” Jhunjhunwala said, adding: "It is like the weather: you may not like it, but you will have to bear it."

Jhunjhunwala, referred to as the Big Bull of Dalal Street, maintained his bullish view on the Indian economy, and said there is gloom and doom for those that have an incorrect business model. But, he says he continues to bat on the front foot amid the ongoing market correction.

Jhunjhunwala projected India’s GDP growth to touch 9 per cent by 2022-2023. "If India heads to become a $5 trillion economy by 2025, then household savings will have to go into equities," he said.

He praised Prime Minister Narendra Modi and his work. "Modi is a distilled socialist after Lal Bahadur Shastri. He is one of the few prime ministers who have seen poverty. Modi knows how to enlarge the size of the cake. He is ready to take bold steps and at the same time knows that investment is key for the economy,” said Jhunjhunwala.

He said Modi would eventually benchmark Indian tax rates to global standards.

Also referred to as RJ, the partner of Rare Enterprises said as a private equity (PE) investor, he looks for five qualities in a company before investing — patience, technology, frugality, people and governance. "Impatience is the biggest mistake in business," he said.

Often referred to as India’s own Warren Buffett, Jhunjhunwala said IndiGo and D-Mart are the two greatest companies made in India in last 10 years. While the former got planes at great prices and created efficiency, the latter proved to be a great differentiator, he said.

RJ said there is a good opportunity in PSU stocks, as public sector firms would be the biggest beneficiaries of the corporate tax cut. “If divestment is done in a measured manner then PSUs can be a mammoth,” Jhunjhunwala said.

He said he is positive on equities and gold for next five years. He expects the yellow metal can rally to $2,500-3,000 per troy ounce. In the international market, gold hovered near $1,500 per troy ounce on Thursday.

The ace investor sees crude oil prices in the $55-65 per barrel range. “I own minimal real estate and jewellery,” he said.

He advised investors to invest in their health. “My bad investment is my health,” he said.