Investing is an art with a lot of science involved. Some chose to call it a game, too. A game which needs lot of conviction and courage. Conviction to find and buy a good stock. And courage to hold it.
Rakesh Jhunjhunwala is one such astute investor whose never-ending love for Titan Company (Titan Industries until 2013) began over 21 years ago. The shareholding disclosure history of Titan Company shows that Jhunjhunwala, along with his wife Rekha, held a 1.57% stake in Titan Company back in June 2002.
On the basis of quarterly (average) unadjusted share prices, the value of this holding was Rs 5.2 crore then. And, when adjusted for corporate actions like dividends, bonus, and stock spilt, the value of the holding is mere Rs 26 lakh. Yes, Jhunjhunwala’s holding the stock over a long term paid off since his Titan(ic) journey began.
Going by Jhunjhunwala’s latest disclosure to the bourses, he has sold a hefty 1 crore shares of Titan Company while his wife has sold 25 lakh shares. All of this in two tranches; 61 lakh (0.6871% stake) between May 22 to June 27, and 64 lakh (0.7209% stake) on June 28. Going by the average of the opening, high, low, and closing prices, on both the stock exchanges, between May 22 and June 27, the approximate price per share works out to Rs 899.08. A similar method for June 28 puts the share price at Rs 850.49 apiece.
The approximate value of the total transactions work out to Rs 1,092.76 crore for the 1.25 crore shares sold. Now, that is 210.6 times the value of Jhunjhunwala’s total stake of Rs 5.2 crore in June 2002. A whopping 4,212.8 times compared to Rs 26 lakh, the value of of the June 2002 stake derived on the basis of the quarterly average adjusted closing price.
Interestingly, the couple’s stake in Titan Company was 8.46% as of March 2018, valued at Rs 7,073 crore using the averages method. Post the May-June 2018 share sell, Jhunjhunwala along with his close relatives (legally termed as persons acting in concert) hold a 7.37% stake in the company which is valued at 5,479.5 crore.
The residual stake is still 1,055.9 times and a mindboggling 21,124.6 times the value of the June 2002 stakes on an unadjusted and adjusted basis, respectively. The Big Bull's Titan(ic) journey shows it pays to be patient.