RK Damani: A stock market genius who put D-Mart right on the top of India's retail map

After witnessing a rollicking start on the stock exchanges on the listing day on Tuesday, Avenue Supermarts, the owner of grocery retail chain D-Mart, continued to surge ahead on the bourses despite the weak broad market sentiment.

A day after Avenue Supermarts shares zoomed 114 percent over its issue price at close, the stock advanced further in today’s early trades and added another 2.6 percent to rise to Rs 657.50.

This shows investors remain bullish about the company’s long-term prospects, and have hence shrugged off the nearly 1 percent fall in Sensex (down 226.03 points) at 29,259.42.

So, what makes D-Mart retail chain such a huge success in today’s highly competitive retail market in India. The credit for it goes to stock broker-cum-businessman Radhakishan Damani, who saw a great future in India’s growing consumption-driven economy.

Known as an extremely media-shy person, the 61-year old RK Damani became the talk of the town following the overwhelming success of Avenue Supermarts on the bourses that catapulted him above some of the known Indian billionaire names like Rahul Bajaj, Anil Ambani, Anil Agarwal and Ajay Piramal.

A resident of Altamount Road in south Mumbai, Damani and his family together own 82 percent stake in the retail chain. And going by the huge upsurge in Avenue Supermart’s share price on the listing day, their holding is now valued at over $5 billion or Rs 33,125 crore. a Times of India report said.

According to Forbes, Damani, an ace investor too, is among top 15 Indian billionaires and is now worth around $5.4 billion, after taking into consideration his equity ownership in VST Industries, Sundaram Fastners, TV18, Blue Dart, 3M India, and property portfolio including the 156-room Radisson Blue resort in Alibaug, which are valued at Rs 3,000 crore.

His other stock picks were GE Capital Transportation Industries, Samtel, Schlafhorst Eng (I), Somany Ceramics and Jay Shree Tea, among others.

In fact, the market capitalsiation of Avenue Supermarts is higher than that of its peers like Future Retail, Trent, V-Mart Retail, Shopper’s Stop and Provogue, whose combined m-cap was Rs 24,000 crore.

Damani was also ranked 98th in the Forbes India Rich List 2015 with a net worth of $1.15 billion, a Businesstoday report said.

Also referred to as Mr White & White for his penchant for wearing white shirt and white trousers, Damani is a well-known figure among the stock market fraternity for his stock selection that earned him a good fortune over the years. According to a report, he refused to participate in the technology boom era of 2000, but included some MNC companies in his stock portfolio.

Damani was in the news two decades ago when he made a hostile bid to take over ITC-controlled VST Industries, but didn’t pursue vigorously. However, his 25 percent holding in cigarette maker VST Industries is now worth around Rs 1,200 crore. He had bought VST shares at a cost of around Rs 63 crore.

Further, Damani Estate and Bright Star Investments, his investment arms, together made a net profit of Rs 75 crore through share trading in financial year 2015-16.

Several stock market veterans always found Damani to be a keen listener, especially to those market players who were more experienced than him.

“He would listen to many stock ideas, but follow the strategies of only one or two people whose views he thought to be logical,” says a broker who used to execute Damani’s stock market trades, “and that approach helped him build his initial capital in his formative years as a trader," a Moneycontrol report said.

Damani is also known as a guru of ace investor and Big Bull Rakesh Jhunjhunwala, who would ask Damani, “When are you listing your company”, a report in the Businesstoday said.

Founded in 2002, D-Mart today has 118 stores, mostly in Western India. One of the few companies to register  profit in retail business, D-Mart reported a profit of Rs 211 crore in 2014-15, higher than Reliance Retail’s 159 crore and Future Retail’s Rs 153 crore, a Mint report said.