Big Bull's magic: How Rakesh Jhunjhunwala turned Rs 1 crore into Rs 20 crore overnight after the 1989 budget

In 1989, a thick cloud of anxiety hung over the Bombay Stock Exchange. The newly formed VP Singh’s government was preparing to present its first Union Budget under Finance Minister Madhu Dandavate. Dalal Street was gripped by panic, as most investors assumed the socialist-leaning coalition would announce an aggressively anti-business budget, slapping heavy taxes on corporations and crushing private enterprise.

Investors scrambled to unload their holdings, pushing the market down sharply. But amid the panic selling, 29-year-old Rakesh Jhunjhunwala saw something everyone else had missed. He believed that VP Singh, who had previously lowered tax rates and abolished estate duty during his stint as Finance Minister years earlier, was fundamentally pragmatist and business-aware. He was convinced the government would deliver a growth-oriented budget rather than a punitive one.

Deciding to stake everything on this single conviction, Jhunjhunwala went all-in. He aggressively bought up heavily discounted shares, most notably iron-ore exporter Sesa Goa. Going against the herd, he accumulated massive positions right into the peak of the pre-budget panic. By the time the Finance Minister stood up in Parliament, Jhunjhunwala’s portfolio was leveraged to the hilt, representing roughly Rs 1 crore to Rs 2 crore of net worth on the line.

When the budget details hit the wire, Jhunjhunwala’s thesis played out almost instantly. Far from a corporate nightmare, the 1989 budget was surprisingly rational and pro-growth. As this brought much-need relief to investors on Dalal Street, market witnessed a sharp rally.

Rakesh Jhunjhunwala death anniversary: 5 market lessons every investor should learn from the Big Bull

When Rakesh Jhunjhunwala recalled his overnight profits after 1989 budget

Rakesh Jhunjhunwala once recalled this episode during an event. "And then came Madhu Dhanwate's Budget…People were so bearish but I was sure that you know..one thing that VP Singh will not give a budget that will hurt the business community. He was the man who first reduced rates of taxes, who abolished estate duty. Although he was a Thakur, he was a businessman. So I staked my life in that Budget. And I was worth Rs 1-Rs 1.5 crores and when the day of the budget, I was worth Rs 20 crores the next day. I stake my life. Right. And that's how I made the real initial money," he can be heard as saying in an old video.

What Rakesh Jhunjhunwala bought for his wife

“In 1989, on Budget day, I had Rs 1 crore and the next day I had Rs 20 crore,” he added. In another seminar, he recalled that after the massive market gain led to an unexpectedly simple first thought — buying an air conditioner for his wife, something she had long wished for since their marriage.

Starting his career with a humble Rs 5,000, Jhunjhunwala built a multi-billion dollar portfolio on Dalal Street. A qualified Chartered Accountant, he invested in both his own name and his wife, Rekha Jhunjhunwala. He favoured stocks in the finance, tech, retail and pharma sectors.

He passed away at the age of 62 on August 14, 2022, following a cardiac arrest. He was suffering from multiple health problems related to the heart, diabetes and kidney, according to sources. Also known as the Warren Buffett of India, his portfolio continues to remain among the ones widely tracked by investors.

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“In 1989, on Budget day, I had 1 crore and the next day I had 20 Crores.”

— Ronit Pereira (@CAronitpereira) February 1, 2026

“For Madhu Dhanwate’s Budget, people were so bearish. I knew VP Singh government won’t hurt the business community. He had reduced Tax rates and abolished estate tax.”

Rakesh Jhunjhunwala. Flame Uni. pic.twitter.com/UPMav783Zh

What Rakesh Jhunjhunwala bought for his wife

Also read | Will Sensex, Nifty continue to bleed on Monday? 4 factors which will drive D-Street action this week

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

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