The One-man Sensex

If you know what he’s buying, you wouldn’t bet against this man. If you do, be afraid. Or, be prepared to lose your life’s savings. On January 10, when the Income-Tax authorities carried out a check at his offices, Nabheram Harakchand Securities - better known as NH Securities - the market crashed 222 points, wiping out around Rs 40,000 crore in market capitalisation in a single day. Two days later, on Wednesday, as the taxman’s shadow over him receded, the Sensex bounced back by 194 points to 5491.

So, who’s this real-time market-mover who can give Big Bull Harshad Mehta a massive complex and send him trotting after his Lexus? There’s nobody in the market today who hasn’t heard of him, yet he remains an enigma. Because, Ketan Parekh chooses to remain as low-profile as his portfolio is high-profile.

Take a look at the gold chest he reportedly owns: Aftek Infosys, Himachal Futuristic, Zee Telefilms, Ranbaxy, Satyam Computers, Global Tele-Systems, Pentafour Software, and so on. Almost all of them acquired at rock-bottom prices. Ketan is believed to have bought Pentafour Software at Rs 140, Aftek Infosys and Satyam Computers at Rs 40 each. Current prices of these scrips: Pentafour Rs 1,000, Aftek Rs 2,400, Satyam (after two bonus issues) Rs 2,500. Not only in Mumbai, Hyderabad or Bangalore, Parekh is apparently big on the nasdaq too, being reportedly the prime mover behind Satyam Infoway’s climb on the tech-heavy US exchange.

Ketan’s rise has been meteoric. Just about two years ago, he threw a lavish party when his net worth reached Rs 100 crore. And his current net worth? Anything between Rs 3,000 crore and Rs 7,000 crore, goes the estimate. Add to that, say Dalal Street sources, a Cessna aircraft and a bungalow in Pune, where he prefers to spend most of his weekends. But he takes utmost care to ensure that he’s completely out of the media glare. He shuns reporters, and is seldom seen. But he’s discussed by all, in hushed, conspiratorial tones, sometimes with respect, sometimes with a shrug, but nearly always off the record.

What is universally respected, though, is his purchases. A broker says that "when people say ‘that’s Ketan Parekh’s counter’, we watch it very closely and none of us would rather go against it". There are few who agree with one broker we spoke to who was sceptical, dismissing him as just another player being overhyped. "So what if he’s around, stockmarkets have lots like him. One shouldn’t go gaga over him." Most consider him to be a savvy investor - the classic value-chaser who buys low and sells high. Says a player: "He enters stocks at low prices, after that we find that there’s a performance backing his companies."

The current front-runner for the Big Bull nametag, Ketan has been instrumental in sending many bears off circulation. But he’s by no means a speculator. It seems he prefers to buy into companies for keeps, not for short-term gains. One dealer describes his style: "He looks at companies like a long-term investor. He likes the businesses of the companies he acquires. And once he realises his target price, he sells. He’s someone of whom the entire market is envious." One of the best examples of his value plays is Aftek Business Machines, where he has a 7 per cent stake, still.

What makes Ketan-the-shrewd-tycoon tick? Sharp operation, big staying power, in money as well as conviction, and sharp switching skills. A software stocks operator for a while now, Parekh bought into them when nobody knew they existed. Says a broker: "If he thinks that the market is favouring cyclical and commodity stocks, he’d be quick to change. If, instead, he finds he’s wrong, he will just coolly go on to create his own trend for cyclical stocks, and make them the new darlings of the stockmarket."

A style of operation that undoubtedly benefits immensely from his relations with the promoters of the companies he invests in. That’s a subject of abundant discussion in market circles, though with enormous discretion. It seems he first meets the management and then makes his decision. A might that even the mountains - in this case the financial institutions - side with. His modus operandi goes apparently like this: he zeroes in on a company first, then the institutions follow suit so that liquidity is created in that particular counter. More stocks are traded. The company then declares good results, and more and more players get into the scrip. Ketan Parekh and the rest of them slowly dump the stock on other greedy investors and rake in the profits.

NH Securities, in fact, is among the top 10 institutional brokers in India. Says one dealer: "He’s a very smart operator and with his considerable experience, he sure knows what to do." Consider also that he is supposed to have engineered the takeover of Kothari Pioneer Mutual Fund by the promoters of Himachal Futuristic Communications Ltd, apparently one of Ketan Parekh’s favourites. That deal, in fact, raised many an eyebrow: what’s a business group - whose main investments are in the telecom sector - doing in the mutual funds business?

Market players also allege that Parekh may have been involved (in addition to Harshad Mehta) in the spectacular rise and fall in mid-1998 of three shares - bpl, Videocon and Sterlite Industries - which made many speculators rich and then caused immense grief to many others. The price movements of all three are currently under investigation by sebi.

So, what’s Ketan’s newest fancy? A software company called Sreeco Systems, listed in Hyderabad. With his benevolent eye on it, the counter has already moved from Rs 20 to Rs 400. And beyond software, his primary field of operation, his latest choice for new records is Padmini Polymers.

What does the crystal ball hold for Ketan? Will his term end with a bang like it did for Harshad Mehta? Fat chance, if you go by the market-mongers. A lot of people believe that he cannot be broken now, and that he is too street-smart to let taxmen bully him into a quiet life. But there are many like him who rule the bourses now, just like the way their predecessors used to in the heady and uncertain days of ‘92. A bull phase, after all, throws up its own transitory heroes.