Radhakishan Damani: Man with the Midas touch in

the stock markets

economictimes.indiatimes.com /markets/analysis/radhakishan-damani-man-with-the-midastouch-in-the-stock-markets/articleshow/32630959.cms
By Kala Vijayraghavan & Sagar Malviya , ET Bureau | 25 Mar, 2014, 11.43AM IST
By
Kala Vijayraghavan & Sagar Malviya, ET Bureau | 25 Mar, 2014, 11.43AM IST
Damani's likes to let his work speak f or itself
and his portf olio of listed investments, at its
last-known market value of Rs 1,731 cr, is an
eight-bagger.
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Since the days of Harshad Mehta, he's known to be the man with the Midas touch in the stock
markets. Rakesh Jhunjhunwala's guru and now India's ace retailer, Radhakishan Damani is
obsessively low prof ile but is revered among traders and investors. Kala Vijayraghavan
deconstructs the man the reclusive investor and retailer:
T hey are three of the best investors in India. Rakesh Jhunjunwala, Ramesh Damani and RK
Damanithe last two, no relation to the otherare competitors and players on Dalal Street, but
hearty f riends of f it f or nearly three decades now. Whenever they meet, they have plenty to
discuss, gossip, share and ask, says Ramesh Damani.
For the past f ew years, he adds, a poser f rom Jhunjhunwala to RK Damani has become a f ixture
during these meetings: "When are you going to list your business and let me buy 10% in it?" It's a
poser that usually draws a gentle smile f rom RK Damani, a pause f or silence, bef ore the room
reverberates with Jhunjhunwala again. "He doesn't like to talk, he is more willing to listen," says
Ramesh Damani.
Radhakishan 'RK' Damani, 59, likes to let his work speak f or itself . And it speaks volumes. It tells
about a value investor whose portf olio of listed investments, at its last-known market value of
Rs 1,731 crore, is an eight-bagger. It tells about a stock market trader who has eyeballed Harshad
Mehta and IT C in their prime, and made a killing. It tells about the retail business that
Jhunjhunwala covets, one that checks out about Rs 4,500 crore through its cash counters and
yet barely registers in the happening retail landscape of India.
For the past f ew years, the imagery of the Indian retail story has been the naked ambition of its
biggest playersthe building and breaking by Kishore Biyani, the try-again approach of Mukesh
Ambani, the tripping of Walmart on its own toes. T hey have all grown. But they have also bled.

Amid these upheavals, Damani's retail chain, D-Mart, has grown consistently and prof itably and,
in trademark Damani style, silently and unobtrusively.
Since the days of Harshad Mehta, Damani is known to be the man with the Midas touch in the
stock markets. He's been Jhunjhunwala's guru. He's revered by traders and investors. But outside
that community, even in the larger business community, f ew know about him. He's obsessively low
prof ile. So f ew images of his are available on the Internet that a mention of RK Damani leads
people to think about his more high-prof ile f riend and namesake, Ramesh Damani. And that is just
f ine by RK Damani.
Af ter two weeks of cajoling, Damani met ET late in the evening at his Dalamal Estate of f ice in
Nariman Point, South Mumbai. He is dressed, as always, in white shirt and white trousersan
appearance that earned him on Dalal Street the nickname 'White and White'. His f irst words reveal
anonymity as a def ence mechanism. "Why don't you just write about D-Mart? I am too small a
person," says the man whose net worth, market players estimate, is Rs 5,000 crore. And this is
without considering the value of the 52% he directly holds in Avenue Supermarts, the company
that controls D-Mart; his investment company, Bright Star Investments, holds another 16% in DMart.
D-Mart has not shut a single store since it started in 2000. At last count, it had 73 storesa
f raction of that owned by Ambani and Biyani, but generating per store revenues even they would
like. Its revenues have increased f rom Rs 260 crore in 2006-07 to Rs 3,334 crore in 2012-13, and
are projected to hit Rs 4,500 crore this year, which would make it India's third-largest branded
retail chain.
It has posted prof its at the net level f or each of the last seven years. Damani iterates basics.
"T here are some 25 things that we possibly do dif f erently and consistently," he says. "He is a
very f ocused retailer," adds Kishore Biyani, CEO of Future Group, who knows Damani personally.
"T here is a simplicity and clarity of thought in his approach to the business."
Investor To Retailer
T hat comes f rom his days in investing. "Whatever I learnt in lif e is by investing," says Damani. In
spite of a business that is in its growth stages, investing is what takes up most of Damani's time.
"Most of the week, I am into investing," he says. "My weekends are f or D-Mart."
For Damani, the idea of what a business should be was shaped by analysing companies as
investments. On the stock market, he wears two hats. T here is Damani the trader, trying to guess
the market's swings. T here is Damani the value investor, with a liking f or brands, cash f lows,
predictability and the long termmuch like the most f amous value investor of our times, Warren
Buf f ett (See box). "I liked the consumer business and I invested in such stocks too," he says. "So,
there was this strong af f inity to start something in the same sector."
In 1999, when retailing was yet just a concept in India, Damani and Damodar Mall, who is currently
the CEO of Reliance Retail but was then a brand manager in Hindustan Unilever, took a 5,000 sq
f t Apna Bazaar f ranchisee in Nerul and added one more in Navi Mumbai. Two years on, D-Mart
was set up and it took over Apna Bazaar. Damani lef t the stock market, f or six years, marking
another prof essional turnf rom trader of ball bearings to investor to entrepreneur.
T he early days were about intensive learning, on the jobstore layout, billing systems, gaining
the conf idence of vendors. Mall and Damani would pore over books on Sam Walton, who built
Walmart into the world's largest retailer. T hey would travel to the APMC market in Vashi or
Crawf ord Market, in Mumbai, to interact with wholesalers and traders. "Within six to nine months,
we knew we were on to a good thing and had the conf idence to apply the model to multiple
locations," says Mall, who lef t D-Mart to join the Future Group in 2005. According to Mall, Damani
was hardworking and unassuming.

"He is as comf ortable chatting with vendors as with the lowest level of employees," says Mall. "He
is not seen as this f ormidable owner, but as a very simple, unassuming man who is happy chatting
with employees with an arm around their shoulders." In the choices he made f or D-Mart, Damani
f ocused on three things: customers, vendors and employees.

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