The Hindu Business Line : RIL at Rs 10, Dr Reddys at 7!

Chennai, Jan. 24 One set out to look for horror stories among the investing community in Chennai following the present mayhem in the markets, but was surprised to find sane, rational and even cheerful voices.

The common refrain was: “Our economy is fundamentally sound and like earlier crashes, this too will pass and the markets will bounce back before you know it.”

Mr Mahendra Shah, a former Madras Stock Exchange broker, who has personal holdings going back to — hold your breath — shares got in the Reliance Industries IPO at Rs 10, and Dr Reddy’s Laboratories below the issue price in the grey market at Rs 7, is as cool as a cucumber. But then he has experience of over three decades in the equity market.

“During the last few days I’m just sitting on the sideline, because there is no use getting entangled in this mess, which will surely pass. I am a bull and would say if you have money, simply buy. But buy fundamentally sound scrips like L&T, BHEL, or even IT majors like Infosys or TCS”.

So has he heard horror stories in the last few days? “Not yet. When people make money in the market, they brag at every party/meeting about it. But when they lose money, they simply lock their lips,” he says, adding, “But these stories will come out anyhow, after 7-10 days.”

RIL IPO, 1976

His confidence in the market has a strong rooting from his experience in broking; today he invests only for himself. An interesting story he relates is the RIL IPO meet that Dhirubhai Ambani held in Chennai in 1976. “He had come with his son Mukesh, and sat behind me while the audio-visual presentation was on. I was the only Gujarati broker at that meet and will never forget that as I left, Dhirubhai almost touched my feet — I was barely 27 then — thanked me for coming, gave me a Vimal pant piece and a Vimal saree for my wife and said: “Please ask your clients to subscribe to my company’s public issue. I’m a hard working, genuine person and will treat with great care the money people invest with us. Tell them that we will work very hard, give them good dividends and their money will only grow.”

Whether it was the Gujarati camaraderie or faith in the entrepreneur, Mr Shah made many of his clients apply; he himself got 300 shares “and am still holding on to all the shares that have come from them!”

‘Only a scientist’

Another interesting story from his repertoire. At the Dr Reddy’s Laboratories IPO meet, “the brokers in Chennai found the chairman very shy and said: ‘Arrey, he is only a scientist, what does he know about business?’ At that very meeting brokers started offering shares at Rs 9, 8 and then 7. So I bought shares at Rs 7! I’m still holding on to them.”

Success stories in the equity market are made from such patience and acumen!