Before there was Harshad Mehta, there was Manu Mundra. He was the man who ruled the stock market. Manu Mundra’s hold on the stock market was so strong that he was given the title of “Black Cobra”. In this post, we will find out who Manu Mundra was, what was special about him and how he became a big shot of the Indian stock market. Let’s get started.
Manu Mundra: The King Before Harshad Mehta
Who is Manu Mundra?
If you have watched the hit Sony Liv show Scam 1992: The Harshad Mehta Story, you must be familiar with the intimidating character portrayed by veteran actor Satish Kaushik. This was Manu Mundra, the man who had the Indian stock market in the palm of his hand before Harshad Mehta’s ascent. Manu Mundra’s influence and control over the Indian Stock Market was so strong that many people claimed that he had a say in the hiring and firing of higher level management staff (including CEOs and MDs). Companies were also said to have taken Manu Mundra’s advice when it came to paying dividends to their shareholders.
Manu Mundra’s power as a Bear operator knew no bounds. Whenever a company did not entertain his demands, he used his short selling technique to crash the share prices of that company down, leading to immense losses.
Where is Manu Mundra form?
There isn’t much known about the early life and childhood of Manu Mundra. Sources claim that he was born sometime during the 1940s in Kolkata. Manu Mundra finished college and started working in the stock market. Manu Mundra started slow but learned all the tools of the trade and started making big money in the stock market.
How did Manu Mundra become the Black Cobra of the Indian stock market?
Manu Mundra controlled the stock market with his powerful Bear Cartel. If the term makes no sense to you, don’t worry, we have got you covered. Let’s take a closer look.
The people who form the bear cartel earn money by short selling stocks and decreasing their prices. As a part of short selling, bear cartel members lend shares from brokers and sell them at an alarming rate. This creates an artificial increase in the supply of the shares, causing a drop in their value. Bear cartel members then buy those shares back at the reduced price to earn a significant amount of profit.
The other kind of stock market cartel is the Bull Cartel. This includes people like Harshad Mehta who expect a growth in the stock market. These people earn money by increasing the share price. These people would buy lots of shares of certain companies, leading to an increase in their demand in the market. This increases the price of the shares and the bull cartel members sell their shares to earn their profit.
Manu Manek’s specialty
Manu Manek stood out from the other bear cartel members because he had a lot of wealth in hand. Manu Mundra would lend his money to other traders to buy stocks. He would charge insane interest rates like 20-30% per year. That helped him get richer and control the market even more. A lot of this helped Manu Mundra obtain some insider trading information as well.
Manu Mundra didn’t just lend money to people to trade stocks, he also tracked which stocks they were buying. He used his vast supply of stock market information to short sell those shares to create excess supply and slash their prices. Then Manu Mundra would buy those shares at a lower price and book his profits.
Manu Mundra was an astute businessman and he knew that he was not going to be able to control the stock market alone. He made his cartel with prominent stock market figures like Rakesh Jhunjhunwala and Radhakishan Damani. This bear cartel was very powerful and worked with a lot of brokers to short positions and indirectly control the Indian stock market.
All of this made Manu Mundra the undisputed king of the Indian stock market. He earned the moniker of the “Black Cobra”. He reigned supreme until Harshad Mehta, “The Big Bull” arrived on the scene and dethroned him. It was an absolute Clash of The Titans.
Manu Mundra vs Harshad Mehta: The Clash Of The Titans
The clash between Manu Mundra and Harshad Mehta was a clash of two opposites. While they both aimed to get as rich as possible with the help of the stock market, their methods were completely different. Manu Mundra was a bear trader who earned profits by short selling stocks and buying them at lower prices. Harshad Mehta, the “Big Bull” worked in the opposite manner. Harshad Mehta used the bear cartel’s trick against them and bought available shares in large quantities and increased their prices, then sold them to earn a lot of profit.
To counter the financial might of the bear cartel’s investors, Harshad Mehta and the bull cartel pumped more money into the market through their investors. The money pumped in the market increased the prices of the shares, which Harshad Mehta sold to book massive profits, thwarting all of the bear cartel’s efforts.
Unfortunately, Harshad Mehta used illegal and nefarious means to achieve this goal. He misused BRs and used them to transfer the funds. The machinations of this scam were unfolded by the famous financial journalist Sucheta Dalal. This led to the end of Harshad Mehta’s reign on the stock market.
What happened to Manu Mundra?
The massive stock market scam of 1992 led to massive changes in the way the stock market was regulated. The Indian Government was shocked at the extent of the scam. As a result of that, The Securities and Exchange Board of India (SEBI) was established. For a long time, SEBI was a non statutory body, but after the scam, things changed.
This led to a lot of strict regulations enforced in the Indian Stock Market. Harshad Mehta was arrested and he died in captivity. Manu Mundra faded away from the Indian Stock Market scene. His erstwhile proteges Rakesh Jhunjhunwala and Radhakishan Damani turned to a different approach to value investing. Manu Mundra became an afterthought and only came back into the public consciousness after Satish Kaushik’s portrayal of the character in the hit show Scan 1992: The Harshad Mehta Story. Manu Mundra is presumed dead now.
What is Manu Mundra’s net worth?
Manu Mundra had been displaced by Harshad Mehta as the kingpin of the Indian Stock Market. But he had still amassed a sizable amount of wealth. At the time of his death, Manu Mundra’s net worth was estimated to be around $50 million.
Who played Manu Mundra in Scam 1992: The Harshad Mehta Story?
Manu Mundra’s role was portrayed by veteran actor Satish Kaushik. The actor passed away recently. He was 66.