Manu Manek Mundra: The majority of us must have heard of the 1992 securities fraud, especially in light of the 1992 scam series, which greatly heightened public awareness of the stock market in the nation. In that online series, Harsha Mehta, the fraud’s mastermind, and the enormity of the entire stock market swindle were made clear to us.
Who Is Manu Manek Mundra?
Before Harshad Mehta, the stock market was governed by another cunning broker who we met in the Scam 1992 series. Manu Manek Mundra, commonly referred to as the “Black Cobra of the Stock Market,” is the one and only.
The late actor Satish Kaushik, who recently passed away at the age of 66 after suffering a Heart Attack, played Manu Manek in Scam 1992.
The most successful investors and traders, including Rakesh Jhunjhunwala and Rakesh Damani, who was a bear at the time but is now anticipated to be the next big bull of the stock market, used to closely follow him and learned their initial stock market tricks and trades from Manu Manek. As we saw in Scam 1992, Manu Manek used to make the stock market dance to his tunes before the arrival of Harshad Mehta.
Those who were involved in the stock market at the time said that Manu Mundra’s influence was so great that directors of firms were chosen based on his whims and preferences, and they even consulted him before paying dividends on stock.
He was a bear operator and would utilise his short-selling strategy and market influence to drive down the share prices of the firm if the companies did not accept his permission, which caused them to suffer greatly. In addition, he enjoyed good relationships with a lot of brokers who would lend him shares that he would later short in the market.
Manu Manek Mundra Net Worth
Manu Manek Mundra’s estimated net worth at the time of his passing was $50 million.
Manu Manek Mundra Early Life
Manu Manek Mundra was born in Kolkata during the years of the late 1940s and the early 1950s, according to information from sources. After graduating, he started working in the stock market. At first, he watched from the sidelines to understand the ins and outs of the market, but eventually he broke through and saw huge returns.
What gave Manu Manek Mundra his “Black Cobra” persona?
You must be aware of what the names “Bull Cartel” and “Bear Cartel” mean in order to comprehend that.
1. Bull Cartel:
As we all know, in the stock market, bulls are individuals who are bullish and anticipate that the market will rise. Individuals in the bull cartel, such as Harshad Mehta, made money by driving up stock prices.
They used to purchase as many shares as they desired in order to boost interest in a specific company’s stock and maximise their ability to profit by selling the shares at a premium.
2. Bear Cartel:
On the other hand, members of bear cartels made money by driving down stock prices; this practise is often referred to as short selling.
In this method, they would borrow shares from brokers with the help of their connections and then sell them as much as possible to expand their supply, which would cause a drop in price. They would then repurchase the shares at a cheaper price and pocket the profit.
Manu Manek became so successful in the stock market because he had a lot of money that he would lend to other traders so they could buy shares in the market because affordable credit was uncommon at the time. This is how he was able to build his wealth. He used to charge outrageous annual interest rates of 20% to 30% for that.
In return, he would receive information about the number of people who trade or invest in the stock market and the stocks they are most interested in, knowledge he could then utilise to his benefit.
The shares he had borrowed from the brokers in the market would then be sold short, increasing supply in the market. When the prices of the shares he is shorting rise, he would then record the profits by purchasing them at a cheaper price.
As a result, he used to profit from the stock market by lending money and selling shares short, both of which significantly increased his wealth
3. Establishing the bear cartel
Even though Manu Mundra formerly had complete control over the stock market, he was aware of the value of scalability and the fact that he could not do it by himself. So, using his name in the marketplace, he established a cartel that, according to a number of reports, included well-known figures from the stock market like Rakesh Jhunjhunwala and Radhakishan Damani.
As a result of their coordination with the brokers and joint control of the entire stock market by shorting positions, this cartel earned the moniker “bear cartel.”
Manu Manek stamped his absolute supremacy on the Indian stock market. By using the aforementioned strategies and his keen sense of perception regarding the state and direction of the market. Hence, earning him the nickname “Black Cobra of the Indian Stock Market.”
Up until Harshad Mehta’s arrival on the Indian stock market, it was all fun and games for him. Following that, we witnessed some riveting confrontations between these two stock market titans.
Harshad Mehta and Manu Manek Competition
As far as we are aware, the market had two different types of investors: the Bull Cartel and the Bear Cartel. Here, Harshad recognised an opportunity that if he could buy these available shares in big quantities, it could turn out to be a profit booking opportunity for him, similar to how the bear cartel used to lower the price of shares to book profits by shorting their position.
When the bear cartel pumped in more money, Harshad Mehta utilised the banks to inject more money. The bear cartel had many investors, therefore to combat this, Harshad initially withdrew money from his investors.
As a broker, he mishandled the BRs banks gave him for the transfer of monies, which sparked the entire 1992 hoax. Learn everything there is to know about Harshad Mehta, his brother Ashwin Mehta, who was a crucial player in the entire 1992 scandal, and the 1992 securities fraud.
Up until the hoax was exposed by journalist Sucheta Dalal, which caused the bull cartel to collapse, the bear and bull cartels were neck-and-neck in their competition to make money utilising the pumping and dumping of stocks approach.
Dhirubhai Ambani and Manu Manek Face Off
Reliance was a fresh entry to the stock market with strong fundamentals. In 1977, Manu Manek’s government, led by Dhirubhai Ambani, allowed Reliance to go public.
In the 1980s, Manek became interested in Reliance. It’s critical to remember that Dhirubhai wasn’t merely a leader who would let his shareholders pay for his decisions.
He held his investors in the highest regard and treated them like family. When he learned that the cobra had attacked his company, he reacted right away. He invited Anand Jain, a classmate and close friend of his son Mukesh Ambani, to take the initiative.
They started selling their shares in line with what the bear cartel had predicted. As a result, Anand Jain and other supporters purchased the shares that the bears were offering to sell. This counter-plan wasn’t the only factor that caused Reliance’s pricing to increase.
The bears got into trouble as a result of their constant selling. Their shares were sold for less money than they had paid for them.
Where Is Manu Manek Now?
When the 1992 stock market scam came to light, not just the stock market but also the Indian financial and political systems were rocked. When the Securities and Exchange Board of India, or SEBI, was established, the stock market underwent stronger checks and balances, overhauling the whole financial system. Learn everything there is to know about Sebi and its function in the capital market.
After that, the entire bear cartel collapsed, and Rakesh Jhunjhunwala and Radhakishan Damani adopted a new strategy for value investing and established themselves as prominent figures in the Indian stock market, while Manu Manek gradually disappeared from view and his real photo is also difficult to locate. He purposefully avoided the limelight and is now thought to be deceased.