- A college dropout who is practically just a 12th pass out.
- A Businessman, an investor, stockbroker, a keen observer and a down to earth man, Radhakishan Damani is everything a mainstream person thinks to be.
Recently DMart touched a $1.5 trillion market-cap milestones. Making DMart bigger than Big Bazaar and other chains of stores in the country.
Within days after this news, DMart’s owner – Radhakishan Damani becomes India’s 2nd richest man surpassing Shiv Nadar, Uday Kotak, Gautam Adani & Lakshmi Mittal. Now, this is obvious that if someone steps up the ladder of richest men in India, their net worth also jumps up with them.
Talking about the net worth of Radhakishan Damani, it’s now $17.8 billion. But still, you see him with a generous smile and wearing decent get up (that doesn’t look like a millionaire’s outfit).
Well, this is Radhakishan Damani – the owner of DMart stores. Let’s have a deep dive into his life and dig out things that all entrepreneurs seek throughout their life.
Early Days of Our Humble Man – Radhakishan Damani:
We all know about his visionary idea DMart – a chain of stores that are bigger than deep-pocketed Big Bazzar or Sponsors. But what about before DMart? What was Radhakrishna Damani doing and how did it all start?
Well, first things first! Talking about Radhakishan’s educational background, you will be surprised to know that a man with a billion-dollar net worth is a college dropout. In fact, his family is also not well educated.
Radhakishan Damani could have been a B. Com pass out from College of Mumbai but he never went back to college after his 1st year. So, all in all, if we take degrees into consideration then he’s a 12th graduate.
He’s one man who proved the philosophy of degrees wrong. If someone is focused and carries a long-term vision then a number of degrees hardly matter!
12th Pass out Goes on An Investing Spree:
Radhakishan Damani got associated with a ball bearing business. It was in the 90s he started making profit through short selling!
Damani was baffled by Harshat Metha. Harshat Mehta at that time was manipulating shares of several listed companies. The man used to take a loan from banks and with that loan he used to buy shares of several companies.
Radhakishan Damani understood his activity and observed that the time his funds will exhaust all the shares where he has invested will start losing their value. This is the time when Radhakishan slowly started buying those shares in which Harshat Mehta used to invest.
One needs to understand the concept of short selling to understand how Damani gained from Harshat’s activity. By the time Harshat Mehta’s scam was revealed, Radhakishan Damani already earned in good amount.
After having a surplus amount generated from short investing, Damani shifted its focus to value investing and long-term investments. The earliest shares that are said to be purchased by Radhakishan Damani were share from Gati & Tci – 2 major companies in packaging and delivery services.
Even today, after being a millionaire, Radhakishan Damani still invests in stock. Thought majorly in long-term investments, but if Damani observes a short-term trend he never hesitates to get back to short-term investing.
Here is one small insight into Damani’s investing spree. He purchased stocks of VST Industries worth ₹ 85 and with time its value is as high as ₹ 3600.
Investor Slowly Moves Towards Consumer Business
One crazy thing about Radhakishan Damani is that even if everything was going fine with his investment spree, he wanted to do something else with his life.
For a long time, he had an interest in the consumer business. Now with sufficient funds in hands, this man slowly (but cleverly) entered into consumer business.
Before starting DMart, Damani purchased a cooperative store chain Apna Bazaar’s franchise. Through this purchase, he witnessed how things work in the consumer business. Being a keen observer, it helped him a lot before he played his masterstroke.
Radhakishan Damani was 32 and had absolutely no knowledge about trading and stuff or how the market functioned. Started off as a keen observer slowly became our wolf of Wal street!
Chandrakant Sampat is Damani’s guru in the world of investing and share business. Radhakishan Damani always mentions that his learnings with the stock market and trading helped him a lot to be what he is now.
Story Behind DMart:
After learning and observing things that are essential to run a consumer store, Radhakishan Damani started DMart in 2002.
Starting DMart was not a masterstroke, but how he planned and how he took advantage of the market’s ups and downs is a masterstroke move.
We all know in 2001-02 when real estate prices were very low. That’s the time when he started purchasing land in major locations for his DMart stores.
Being an investor helped Radhakishan Damani a lot in forming a well-planned strategy for DMart. Which is why he started buying land during the times when the entire real-estate market was bloodshed.
Let’s have a look at why DMart is so popular.
1. Long Term Goal:
A long-term investor is never someone who carries a small vision. When Radhakishan turned an entrepreneur, he moved with the same approach and built his dream store DMart without relying on any quick shortcuts.
This man never leases property for his stores but buys it. Which saves him from a big rental outgo.
2. Start Small but Don’t Carry A Small Vision:
He might have started a small-scale business and went ahead expanding slowly. Small-scale gave him better control of the supply chain and allowed him to focus on profitability right from the beginning. In 15 years, stint, DMart generated profit almost every year.
3. Value People:
After purchasing Apna Bazaar, his focus shifted towards building his initial team. Radhakishan Damani also built a strong relationship with vendors and suppliers.
4. Go Slow:
It took some 16-years to spread 119 stores. The number might be small in terms of expansion but looking at growth, sustainability and long-term vision it is nothing but mesmerizing.
What Strategies Were Adopted By Radhakishan Damani for DMart:
Well, no one can actually get into this man’s mind and tell what he’s been thinking lately. But looking at his 16-year old nurtured business, here are some things worth noting and appreciating.
Take customers, Employees & Vendors
Since DMart is targeting middle-income consumers, Radhakishan Damani made sure that none of his stores are in or anywhere near to malls.
Vendor relationships are a crucial part here. Coming from a trader background, his vendor relationship game has been as strong as his vision is.
FMCG industry has a payment of 12-21 days, but DMart pays its vendors on the 11th day itself. Helping DMart to always be in the good books of its vendors.
Radhakishan Damani prefers hiring raw talent and invests heavily in training in the employee workforce.
Keeping the 3 most crucial people in proper sync and his strategies in mind, DMart definitely offers 6-7% lower than its competition. Since rent adds in a big way to the operation costs of a retailer, the Radhakishan Damani made sure it’s no more a problem for the team.
DMart stores are in the suburbs in the metros and in TII & TIII cities, operational costs are lower (as compared to TI cities).
Talking About Success:
Here we have 2 things to cover. First being, the success of DMart stores and second the success of Radhakishan Damani – the unstoppable man behind DMart.
In 2007, DMart began its expansion and wen to open various stores in Ahemdabad, Baroda, Pune, Sangli & Solapur. Expansion strategy followed a collective approach and was formulated in such a way that they used local vendor support and opened stored all the stores surrounding them.
By 2012-13 – Dmart had revenues as high as INR 3,334 crores (INR 260 crores in 2006-07). Its competitors like Future Group and Reliance Retail who had more stores than DMart were nowhere near Radhakishan Damani!
In a span of 13 years, DMart managed to achieve profitability and made around 2.5% profit. By 2014, they had some 73 stores across Maharashtra, Gujrat, Hyderabad & Bangalore with a projection to hit INR 4500 crore in revenues.
By the time DMart reached 2015, revenues crossed INR 6450 crores and the company reported a profit of INR 211 crores in FY14-15 which was much higher than Reliance Retail’s INR 159 crores and Future Retail’s INR 153 crores.
For now, DMart has some 91 stores countrywide across 26 cities including Telangana, Andhra Pradesh, Madhya Pradesh & Karnataka.
We will not talk about the success of Radhakishan Damani much. But here is everything you need to know about the man who is now India’s 2nd richest man.
Summing Up:
The story of Radhakishan Damani is nothing less than a rollercoaster ride. A college dropout, an investor, a businessman and now India’s 2nd richest man.
We have a lot to learn from this man and a lot more to learn in the coming time. He has proved almost everyone wrong and especially those people who criticize someone on behalf of degrees and ground to earth attitude.
He is also said to be someone who doesn’t care to listen to what everyone else says. If Radhakishan Damani is focused on something, practically nothing can come on his way.
