Rs2,747b worth Damani now India’s second richest person

MUMBAI: Radhakishan Damani, an astute stock market investor and founder of Avenue Supermarts has become India’s second richest person with a networth of $17.8 billion (PKR2,747 billion), next to Mukesh Ambani, according to Forbes’ Real-Time Billionaires Index.

After a rally of over 5% of Avenue Supermarts shares this week, Damani has pipped past HCL’s Shiv Nadar ($16.5 billion), Uday Kotak ($14.9 billion), Gautam Adani ($14.1 billion) and Lakshmi Mittal ($12.1 billion) in the Forbes Billionaire Index. The total net worth of India’s richest person, Mukesh Ambani is at $57.4 billion, as on Saturday, reported foreign media.

Shares of Avenue Supermarts—the firm that controls supermarket chain D-Mart—rallied 31% so far this year and added about Rs 36,000 crore in market capitalization. Currently, the stock is trading at a market capitalization more than that of WiproNSE -0.35 %, ONGC, UltraTech CementNSE -0.36 %, and HDFC LifeNSE -0.56 % Insurance. Avenue Supermarkets shares rallied sharply after the company announced a share sale for institutional investors on February 5. The company raised about Rs4,000 crore at Rs2049 a piece. On Thursday, the promoters announced the offer for sale of 2.28% at a base price of Rs2,049, a discount of 20% to the prevailing market price.

Analysts and investors have criticized Avenue for being expensively valued, but that has not hurt the stock’s performance so far.

Out of the 25 brokerages that cover Avenue, 11 have a buy rating, while 9 have a sell. Five brokerages have a hold rating. The average target price on the stock by analysts is Rs1,897, 24% lower than the current market price of Rs2483. Brokers said low floating stock and relatively stronger profitability have ensured that the stock has been a Dalal Street favourite.