Manu Manek Mundra: The Cobra Of The Indian Stock Market

Following the release of Scam 1992, many people have developed a fascination with both Harshad Mehta and his competitor, the Cobra, or Manu Manek as he is known in real life.

We give a glimpse into his persona and some of his well-known market escapades in this piece. Find out by reading on!

Who was the real Manu Manek?

Manu Manek was born in Kolkata in the late 1940s and the early 1950s, according to what is known. He started working as a stockbroker on the stock market after completing his education. He watched from the sidelines, picking up details on the early Indian marketplaces.

He started applying his expertise and analyses once he had enough experience. Manek transitioned to market operation after seeing success. A market operator is a person who manipulates pricing for their own benefit.

Manek quickly rose to prominence in the market as a result of his play in the major leagues. His dark appearance earned him the moniker "black cobra."

The founder of K R Choksey Shares and Securities, Ratilal Choksey, claims that Manek was a legendary figure and a potent operator who controlled the market. It was difficult to become a corporate director without getting his approval. Evidently, he would provide the names or lists of the directors to the firms on the day of the election, and only those individuals were ever chosen.

Because of Manek's dominance, according to Choksey, any corporation seeking to nominate a director must first obtain his approval. Only those who had Manek's approval or selection were appointed.

This also applied if the business intended to distribute dividends. Additionally, he established a network of brokers that would carry out his instructions.

His influence also extended to the exchange's authorities, who occasionally favored him when it came to paying debts. This implied that Manu Mundra not only had complete control over the exchange but also had a firm grip on the listed corporations. He became the unchallenged ruler of the Bombay stock exchange as a result.

As it still is in India, many people credited Manek's success to God giving him the ability to read the markets. Let's examine the approach he used to achieve achievement.

How did Manu Manek amass such great Wealth and Control?

It's vital to realize that the Indian markets we're discussing are from the 1970s and 1980s before we continue.

The SEBI did not impose any market restrictions that came close to matching those in effect today. Manipulators like Manu Manek and Harshad Mehta were given the chance to take advantage of the numerous weaknesses that were present as a result.

There are two primary tactics for trading in the markets. basically bullish and bearish.

The vast majority of investors have an optimistic outlook. These investors buy shares on the expectation that they will appreciate in value. They can then sell the shares at a higher price and realize profits through capital gains. This method of investing is quite upbeat.

Bearishness, on the other hand, is a somewhat negative outlook. Investors seek out profitable companies or those that are expensive in order to profit from their decline.

When Manek was in operation, derivatives weren't a thing. To short stocks, they adopted a different strategy.

Low-cost credit was uncommon in the 1980s. Lenders would frequently charge outrageous interest rates, particularly when someone was using the loan to speculate in the market.

To use this lending facility, for which Manu Manek would charge 20% to 30% interest, traders would swarm to him. He would also receive information on the shares the traders are aiming for in exchange.

Let's go back to the other stock shorting strategies. Manek now knew which shares were being sought after and would eventually increase in value. If one had an excellent working connection with his broker, the broker might lend him shares.

These shares would be given to Manek by the broker, who would then sell them in the open market. As a result, there would be more shares available on the market, which would enhance selling pressure.

The price of the shares would therefore decline as a result. Manek would then repurchase these shares at a lesser cost, realizing a profit.

Manek was able to earn from both ends as a result—lending and shorting. His trading technique has become less of a gamble thanks to the information he has. His tactics earned him the moniker Cobra.

Manu Manek and the Bear Cartel

One person couldn't move the market at a size where prices would be significantly impacted. After realizing this, Manu Manek established the bear cartel. These enormous sums would allow them access to finance, which would be sufficient to influence the market.

The group members would do what he said. Manek was now a formidable opponent as a result. He was then able to use fear to control the market. Up until Harshad Mehta came, this cartel ruled the market.

Numerous individuals who are now regarded as some of the finest bulls were members of the bear cartel. These people include Radha Kishan Damani, the creator of Dmart and a multibillionaire.

The other well-known figures are Nimesh Kampani, Dinesh Dalmia, Ajay Kayan, Raamdeo Agrawal, and Shankar Sharma.

In Closing

Following their final fight with Harshad Mehta, the cartel members made the decision to change their investing strategy. Value investment was one aspect of this.

Manek, in contrast to Rakesh Jhunjhunwala and Damani, had done a commendable job of avoiding the limelight. This is one of the factors contributing to the lack of information about him and his other accomplishments.