Farmers son to a Billionaire.

Every time someone asks me what kind of genre I like reading or watching, I always say, "Rags to Riches". At least some of the people who know me are fed up with this answer and have stopped asking me this question. What they don't understand is that reading the rags to riches story gives me hope—a hope that I might be one of them. These stories aren't scripted with ink; rather, they are scripted with blood, sweat, tears, long nights, hard work, passion, sacrifices, and mistakes. It's a combination of these unseen activities that corresponds to what we call "overnight success". Raamdeo Agrawal is the protagonist of one such story. Born in 1957 into a small middle-class family in a village, Raamdeo always had the urge to earn money. The only thing that he wasn't sure about was how he was going to make money. Thinking about making billions sounds great, but practically scripting the idea and following the path takes a lot of courage and patience. And Mr. Agrawal had a lot of it.

After completing his schooling in Raipur, he moved to Mumbai to pursue his higher education. He completed BCom at the University of Mumbai, followed by Chartered Accountancy in 1983, because forget 2023, BCom had no value even in the 80s. Having Marwari blood, working for someone else wasn't in his DNA. He started working as a sub-broker in 1987 on the Bombay Stock Exchange, crowding inside a hall and shouting orders under the open outcry system.

 

 

(The round building is called Rotunda," and that was the dealing room.) You all might have seen the famous series on Harshad Mehta, Scam (1992). In that case, the place where Harshad started working as a jobber was that round place called the Rotunda.

Every investment manager has investing skills developed in them. They need that awakening. In Mr. Agrawal's case, it was his brother, Sukhdev. Sukhdev has a surplus of Rs 4-5 lakh and was motivated to park that surplus in FD. Raamdeo insisted he let him manage that money for him, to which Sukhdev agreed. Managing his brother's account gave Raamdeo insights on how the investment management industry works. In 1987, Motilal Oswal and Raamdeo Agarwal founded Motilal Oswal Group, a small stockbroking firm. They started as a sub-broker, later diving into a standard broker, then into consultancy, then into money management, and now they offer every financial service out there. Their assets under management stand at more than Rs 28,000 crore.

As a sub-broker, they were able to build a small portfolio of only Rs 10–15 lakh till 1990. Enter Harshad Menta, and in the next 20 months, Mr. Agrawal and Mr. Oswal collectively made more than Rs 30 crore. That's the power of the stock market. It favors the brave. It might not rain for some time, but when it does, make sure you have buckets outside and not water bottles to collect water. The biggest breakthrough the company got was when they received their PMS (portfolio management services) license. This opened doors for the elite to come and invest with them. For all those who don't know how powerful this license is, let me tell you that the minimum required capital to invest with someone who has a PMS license is Rs 50 lakh. You come into contact with the elite and only the elites.

Mr. Agrawal holds 35% of Motilal Oswal Financial Services. Apart from this stake, he is famous for betting big on Hero MotoCorp. During the 1990s, markets discounted the fact that the disposable income of Indians was increasing, and that Indians were willing to purchase motorcycles. The rising population and rising demand for motorcycles fueled his intuition. He invested around Rs 10 lakh at Rs 30 per share, and today, Hero MotoCorp shares trade at around Rs 2927. It touched a high of Rs 3244, a 100X. His hero's position had been earning him Rs 5–6 crore in dividends per year for, I don't know, how many years.

I strongly believe that a guru can definitely uplift his shishya's life. And, coincidentally, Mr. Agrawal also happens to be a disciple of none other than, you guessed it, Warren Buffett. In 1995, he had the opportunity to bid for a lunch with Warren and now attends his annual meeting religiously. Mr. Agrawal's investment philosophy is one of the simplest I have ever come across. He urges young people to start early. Initially, save like a pessimist and invest like an optimist. Don't touch leverage. Have a role model in life because that role model or his teachings will pull you out of the well when life hits. Specialization is a must for long-term success. You have got to find a skill that you can perform better than others and keep improving. Believe in long-term investing, and, most importantly, compounding works wonders when it isn't disturbed. Having a long-term mindset will help you navigate short-term fluctuations. That's it. These are his principles. These principles are so powerful that they helped Mr. Agrawal uplift himself from living in a small house with five siblings to a sea-facing penthouse in Worli worth Rs. 48 crores. Personally, one of the best moments of 2022 was when I met Mr. Agrawal. It was like a dream coming true. 

 

It's a stereotype that rich people are mean and greedy. This man is trying his best to break those stereotypes, for sure. He spent 15 minutes with me, talking about markets, life, and a few other things. He had no obligation to stand and talk with one of his fans, yet he did. He had billions to manage and thousands of employees to address, but he still spared me 15 minutes. I have no words. One of his lessons was about observation. There are brands everywhere. You can point at someone, and that person might be wearing a brand that is listed. Go dig deep inside that brand, and you will gain some valuable insights. When you observe like an investor, you become one. Not just brands, he also pointed out that there are various habits that people follow, and having open eyes and an open mind can help you gain those habits and can help you wash your hands with the bad ones. Indirectly, he taught me that no matter how wealthy or famous you become, you have to keep you head high and feet on the ground. 

I can't promise to build an organization as huge as he did, but I can guarantee that I will keep my head high and feet on the ground throughout this process. 

Happy Investing.