Ace Indian stock market investor Rakesh Jhunjhunwala is not impressed by food delivery company Zomato’s stellar listing at the bourses.
In a webinar organised on Saturday by Equirus, Rakesh Jhunjhunwala made it clear that he is not going to invest either in Zomato or in Tesla and said that what he buys is important and at what price he buys is most important. In this webinar, Mohandas Pai, former director of Infosys and current Chairman of Manipal University was also present.
Explaining his move, the ace investor said: “What I buy is very important, at what price I buy is the most important. Let Zomato be worth Rs 99,000 crore and Tesla be $600 billion or $6 trillion. I am not going to buy these stocks.”
He said he need not go to every party in town. “Hangover comes only the next day!”
Rakesh Jhunjhunwala went on to add that for entrepreneur money is like ‘Oxygen’ but ‘capital is not as important as the business model is.’ Asking to learn from Zara and Walmart Rakesh Jhunjhunwala said, “I like cash flow business model rather focusing on valuation.” He said that valuations can’t be more important than the business model and its sustainability.
The Rs 9,375-crore Zomato IPO was listed on the exchanges on July 23. After a robust response to the subscription, the Zomato shares made a strong stock market debut, closing the initial day of trade at Rs 126 per share. Zomato’s stock price was up 66 per cent from the IPO price of Rs 76.
The stock opened at Rs 116 on NSE which is at a 52% premium to its final offer price of Rs 76. The listing price on the BSE was at Rs 115, up 51% to is the final offer price. By Noon, Zomato had hit an intraday high of Rs 138 which pushed its market-capitalization to more than Rs 100,000-crore, making it the 46th stock in the list of 50 most valued counters. Sanjeev Bikhchandani hold 24.6% stake in InfoEdge
Jhunjhunwala said one-third of his investment is now in unlisted space and that he has also invested in a new airline. He said what he has learnt from startups is that one over-anticipates changes, especially with technology companies.
Jhunjhunwala said he does love the attitude of young entrepreneurs. He called the speed and devotion the young entrepreneurs put in as unbelievable. He said what a company needs is opportunity, frugality, corporate governance, technology, and an ability to change. “The race is not ending tomorrow,” Jhunjhunwala said.
