Damani’s wealth surges amid lockdown
MUMBAI: The Indian tycoon whose net worth surged the most among peers as the deadly coronavirus roils markets worldwide can thank nation’s hoarders with millions scrambling to stock up on staples amid the world’s biggest isolation effort.
The net worth of Radhakishan Damani, who controls Avenue Supermarts Ltd., has surged almost 11% this year to $10.7 billion, singling him out as the billionaire with most gains among the 12 richest Indians whose wealth is tracked by the Bloomberg Billionaires Index. Shares of Avenue Supermarts, which contribute nearly all of the wealth to Damani’s net worth, have advanced 24% this year.
Damani, who was raised in a one-room apartment in a Mumbai tenement block, has seen his wealth swell at a time when a stocks rout has shaved more than a quarter off the net worth of his billionaire compatriots Mukesh Ambani and Uday Kotak on fears that the pandemic will gut economic growth. Damani’s supermarket chain, known for its thrifty cost structure, gained from panic buying of household essentials after India decided to place its 1.3 billion people under a three-week lockdown last month.
“People have been buying in panic and hoarding during the lockdown that drove the sales, making the company’s share a perfect hedge amid rout,” Arun Kejriwal, director at Kris, an investment advisory firm in Mumbai. “Their unique no-frills model and also choosing to operate from locations outside malls, will help them to tide over the situation.”
Cyrus Poonawalla, who founded the vaccine manufacturer-- Serum Institute of India, was the only other Indian tycoon among the 12 whose wealth rose in 2020. Poonawalla saw his net worth rise by 2.6% to $8.9 billion this year, according to the Billionaires Index.
The low-cost model will hold Avenue Supermarts’ D-mart stores in good stead even after the panic hoarding for staples cools down once the lockdown is lifted. The supermarket chain makes money by giving customers fewer choices of no-frills products, negotiating hard with its vendors and avoiding any advertising expense.
D-mart’s rivals have not benefited as much under the same circumstances. Future Group, which runs India’s second-largest retail chain by revenue and has over 1,300 stores across the country, saw shares of its publicly-traded retail unit nosedive 80% this year amid mounting debt woes.