Big bull Rakesh Jhunjhunwala trims stake in 10 stocks, adds one name to portfolio: Find out details

The recent rally in metals, real estate and media stocks had led to some overvaluation, feel experts. Sectors like metals might remain under pressure for the near term due to global constraints.

August 04, 2022 / 01:43 PM IST
Rakesh Jhunjhunwala

Rakesh Jhunjhunwala

 
 
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Renowned investor and ‘big bull’ Rakesh Jhunjhunwala churned in his stock portfolio during the quarter ended June 2022, and partially or completely exited from 10 stocks, while adding one name.

The ace investor marked a re-entry into a stock he had exited during January – March period, as he bought 1.4 per cent stake in farm equipment / industrial auto major, Escorts Kubota Ltd. At the end of December 2021, Jhunjhunwala's holding was at 5.4 per cent of total shareholding of the company. Now, the total value of his stake in the company stands at ~Rs 300 crore.

With the correction in metals and crude prices, experts believe that the demand for farm equipment should rise, with a good monsoon boosting tractor sales. “India has so far received good rainfall this time and demand pickup was seen in the rural areas along with pick-up in credit, which can bring up some good number for agriculture-related stocks”, said Manoj Dalmia, Founder & Director, Proficient Equities Ltd.

Experts believe that Escorts Kubota is an exciting name in the Industrial Auto component manufacturing sector.

“Being a healthy stock in the Industrial Automobile sector, Escorts has very bright prospects in Indian economy, however, the stock showed muted earnings performance this quarter and has seen some correction despite Jhunjhunwala’s backing”, said Sonam Srivastava, Founder at Wright Research.

Data also showed that during the quarter ended June 2022, big bull Rakesh Jhunjhunwala has reduced his stake below one per cent, or taken a complete exit from names like National Aluminium Company, Indiabulls Real Estate Ltd, Delta Corp and TV18 Broadcast.

“Recently, there had been a rally in metals, real estate and media stocks which have now become overvalued. Sectors like metals are under pressure due to global constraints and might face more of it, in the near term”, added Dalmia of Proficient Equities.

Rakesh Jhunjhunwala held 2.50 lakh equity shares or a 1.36 per cent stake in National Aluminium Company Ltd (NALCO) as of March 31, 2022, but the shareholding pattern did not include his name in the June quarter. Shares of NALCO have corrected more than 35 per cent in the last six months, as the global demand for metals slows down, and prices correct. As a result, “many investors have exited metal names last quarter, and given that there are projections of a global slowdown, this call by Jhunjhunwala seems apt”, said Srivastava of Wright Research.

As of the March 2022 quarter, Jhunjhunwala held a 1.10 per cent stake or 50 lakh shares in India Bulls Real Estate, but now his name is missing from the list of shareholders. Indiabulls has seen a correction of close to 50 per cent over the last six months. “The company is under pressure since it reported a consolidated net loss of Rs 87.21 crore for the December 2021 quarter and this sell-off by Rakesh Jhunjhunwala might be a strategic exit from cyclical stocks in the real estate sector, in light of the slow growth and rising interest rates”, said Srivastava.

The gaming and casino firm Delta Corp had 1.2 per cent shareholding with Rakesh Jhunjhunwala and his wife Rekha Jhunjhunwala as of June 14, 2022. At that time, the duo had curtailed their stake in the company by 1.16 per cent from the earlier holding of 3.36 per cent. The stake sale sparked a noticeable selloff. As per the data for the end of the June quarter, the ace investor’s holding is less than one per cent in the company, with a possibility that he has completely exited the stock.

Delta Corp reported a consolidated net profit of Rs 57.13 crore in the quarter ended June 2022 and has filed for an IPO of its gaming division. However, “the company is facing concerns over inclusion of online gaming, casinos and race courses under GST, and a hike in taxes because of which Rakesh Jhunjhunwala might be booking his profits in this gaming company”, said one analyst.

Rakesh Jhunjhunwala has also reduced his stake in the media company TV18 Broadcast, which recently bagged the exclusive digital rights for cricket’s mega event, IPL (Indian Premier League).

The other companies where the ‘big bull’ has trimmed his stake during June quarter are NCC Ltd where his stake has come down by 0.2 per cent, while in DB Realty Ltd, Autoline Industries Ltd, India Bulls Housing Finance Ltd, Tata Motors and Nazara Technologies, his stake is down to 0.1 per cent each.

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Gaurav Sharma
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