5 Fascinating Facts about Radhakishan Damani, the Self-Made Billionaire
Radhakishan Damani climbed his way up from a small-time trader to become a self-made billionaire. A quiet, unassuming 61-year-old man, Radhakishan Damani occupies a place among the pantheon of billionaires along with Mukesh Ambani, Gautam Adani, and others.
Here are five fascinating facts about his financial journey, which resulted in him becoming a self-made billionaire:
- Coming from a Marwari family involved in the stock trading business, Radhakishan Damani initially started as a small-time trader in ball-bearings. After his father’s death, he decided to enter the stock trading business (before online share market trading even existed). He made his money by short-selling stocks just before the Harshad Mehta scam and made windfall gains with a timely exit of his positions before news of the scam broke out.
- When Radhakishan Damani invests in stocks, he follows Warren Buffett’s philosophy of investing by believing in the value investing method. For most of the stocks in his portfolio, the averaging holding period varies between 5 and 10 years.
- Building up the Avenue Supermarkets and D-Mart retail store brands:
After accumulating sufficient capital from his equity investments, Radhakishan Damani purchased land cheap in the Navi Mumbai region of Maharashtra. He started his anchor retail store that laid the foundation for the retail store empire that was to emerge. Afterwards, he leveraged his skills in retailing products and building lasting relationships with the various suppliers and vendors. Two years later, he created the inaugural D-Mart store, which was in Mumbai. Avenue Supermarkets made a stellar debut on the bourses in March 2017 at an Initial Public Offering price of Rs. 299, with a listing premium of 102.14%. The closing price of Avenue Supermarkets on 17th February 2022 is Rs. 4115 per share and the market capitalization on the stock exchange is Rs. 2.66 Lakh crore. Within a period of five years, Radhakishan Damani had built a successful, lasting retail brand that catapulted him into the billionaire league. In his race to the top, he left his closest rivals in the retail space, Future Retail and Aditya Birla Fashion, far behind. Avenue Supermarkets is valued at a whopping US$ 35.5 billion. Additionally, his net worth also includes his stock portfolio of other equity companies.
- The stocks in his personal portfolio are the tobacco firm VST Industries, United Breweries, India Cements, Sundaram Finance, Blue Dart, Food & Inns Ltd., Mangalam Organics, Simplex Infrastructure Ltd., and Spencer’s Retail, according to Forbes magazine. He bought most of his portfolio stocks when they were undervalued and held them for long periods. For instance, he purchased shares of VST Industries for an average acquisition price of Rs. 85. VST Industries is currently priced at Rs 3,009, as of the 17th February 2022. His stock portfolio, valued at around US$ 10.5 billion, demonstrates the true exponential growth potential of equities.
- D-Mart’s robust business model: He has purchased most of the premises at different locations for the D-Mart stores. Using his own-versus-lease model has served as a huge cost-cutting measure with the added benefit of appreciation of property values. He draws in retail customers by pricing the products in his stores at relatively lower prices compared to other retailers and even e-commerce stores. This ensured that there was no reduction in customer footfalls even during the height of the Covid-19 pandemic. Avenue Supermarkets has been consistently delivering profits for the past 15 years. He has maintained excellent relationships with his vendors and suppliers by consistently paying them on the 11th day from the day of purchase. This payment policy allows him to procure the various products needed in his stores at a comparatively lower price from FMCG and other suppliers. Radhakishan Damani passes on a part of the cost reduction benefits his stores realise to his customers, through his payment policy. D-Mart stores don’t put on display frills and aesthetic showrooms. All products being available at the best prices ensure his stores are filled. Reliance Retail stores constitute the stiffest challenge for Avenue Supermarkets.
He has been featured in multiple billionaire lists; from the Forbes List of Indian Billionaires to the Hurun India Rich List. He was a college dropout, but successfully transformed himself into a billionaire. He has a quiet, unassuming personality and leads a simple lifestyle that has not altered despite his riches. You can learn many lessons from Radhakishan Damani, including how to meet and conquer challenges in life and the true art of passive investing.