IT WAS around 8.45 am on October 31, 1984. “Khoka da”, a journalist friend, was the first to ring up to break the news. “Check this out yourself, but Mrs Gandhi has been assassinated,” he said.
Two phone-calls to New Delhi and a two-minute talk with SL Burdhan, then president, Calcutta Stock Exchange (CSE) later, an impromptu decision was taken to keep the market closed, at least for half an hour till the elders arrived to take a decision. “We were fearing the worst. Indira Gandhi’s assassination could lead to devastation. Debu Bhalotia was informed,” recalled a senior member of the CSE governing board at that time.
“There were two things that Debu Bhalotia said the moment he arrived at the hastily summoned meeting. He urged the president to keep the CSE market closed for sometime to watch the trend in Bombay and he also gave his personal chopri (the red notebook on which brokers used to scribble their transactions in the days of the open outcry system) to Ajit Day of Dayco Securities, also a board member, saying that whatever was needed to be done, should be done. Those were his exact words,” the member recalled. “It was crisis time,” recalled Ajit Day, past president of the CSE, when asked about the incident. “We were pulling out all stops. Ganesh Pyne (a very big institutional broker of those times) got instantly in touch with GS Patel, then chairman of Unit Trust. Patel saab passed on necessary buy orders to Pyne and Hemendra Kothari, for whatever was needed to be bought in the Kolkata and Bombay markets, to prevent a landslide. The market started at 12 noon and immediately started falling, some 7-10%. The Securities & Exchange Board of India wasn’t born still, so we set manual filters at around 12.40 pm, freezing the price line and inviting all who wanted to sell to offload at those prices,” he recalled.
It was at this juncture that Debu Bhalotia stepped in. “He stood like a rock in Kolkata, mopping up all that anybody had to offer. Manubhai Maneklal did the same on the Bombay Stock Exchange. Unlike the dementors in Harry Potter’s world of Azkaban, he sucked the panic out of the system,” Mr Day said.

That was the quintessential bear. Two of the best that ever was on the Indian stock market circuit. Manu Manek in Mumbai and Debu Bhalotia in Kolkata. Bears to the core, they were also two of the best readers of the secondary market movement in the history of the capital market system in the country.

Sevantilal Shah of Stewart & Co, often dubbed as the Manu Manek of CSE, doesn’t quite agree. Approaching 80, this widely respected stalwart of the stock market for 52 long years, felt that Manu Manek, a very close friend, was a financer first and a bear later. “In the 70s and 80s, he used to finance about five lakh shares every fortnight, which was awesome. He was very protective about small investors and anytime, if he had financed someone who was not willing to square off when Manubhai suspected weakness in the market, he would advise him to reduce his losses. If he still did not heed, Manubhai would short-sell himself so that if the bull concerned was forced to go in for distress sale, he could use his position to counter-balance. Fiercely protective about his self-respect, Manu Manek wouldn’t ever let anybody ruin that,” Mr Shah said.

Manu Manek was a legend. “He had the natural gift of being able to detect any hollowness in the market,” Mr Shah recalled. “But he was still intrinsically a badla financer. Not like Debu who was perhaps an equally wise operator, but who was much more of a bear in the truest sense — hammering in a bull phase and standing right upfront during a fall. Debu understood the pulse of the market in a rare way,” he said.
Both Mr Day and Mr Shah rue the fact that the Indian stock market has now got totally devoid of bears. “Without them, you do not have a first line of defence,” they said. Most agree. Standing by the market in its hour of need was always a hallmark of a classical bear. And they were supported by the industry.
“August 5, 1965, the war with Pakistan broke out. In 1969 forward trading got banned. In 1971, the Bangladesh war broke out. In 1984, Indira Gandhi was assassinated. In 1990 came the Gulf crisis. Didn’t the stock market suffer? Like hell it did, and it took the combined efforts of all, including the industry, to sort such crises out. Bears played a very important role in that,” Mr Ajit Day said.
A classic example of such a rescue act was the crisis at the CSE in 1989 when Mahesh Bhiwaniwalla threw his hands up, following the bankruptcy of Rajendra Sethia, a wealthy Indian businessman, who defaulted by a few hundred million dollars worldwide in the mid-80s.
Mr Shah himself stood by to prevent the CSE getting mauled. “Darbari Seth took up some 1.1 lakh shares of Tata Tea at Rs 90 apiece. GP Birla bought back some 30 lakh outstanding Hindustan Motors shares. JK Synthetics was similarly sold off, as was Tisco,” Mr Shah recounted.
“There was then a bonhomie, a spirit of camaraderie among all of us. Girdhari Kejriwal, Bihari Khandelwal, Gokuldass Bangur, Govind Dasji Bangur, DS Prabhudas and Jamnadas Morarji in Mumbai, Hemendra himself .... anytime, anybody could be asked to stand up for the market,” he added. Were bears also destructive? “You see they used to be created that way perhaps. Bihari babu, I remember, used to relentlessly hammer prices down whenever they showed a very strong upward jerk. So did others. But the positive side was that, the counter offensive sobered the bulls too,” Mr Day said.
Ajay Kayan was dubbed a bear operator in 1992, which he was. Mr Kayan played a seller to about everything that Harshad Mehta bought. But, Mr Kayan isn’t quite the classical bear. In fact, latest on him is that his fairly heavy bull position on the market has just got squared off in this falling market situation.
As Mr Day recalls: “The Gulf crisis was perhaps one of the worst to hit markets before Harshad did. Bhalotia had passed away by then. Manubhai was a big support, as were badlawallahs like Sevantibhai and the Oswals of Delhi. A Kolkata-based residuary non-banking company played a stellar role in the support operations too, even as the Union government monitored the market practically every half an hour. It had taken all of us nearly a month to bring the situation under control. I have never had a bear mentality, but as far as my experience goes, the market even today needs bears to provide the necessary checks and balances.”

 

The brokers charged commission of 1% but the clients were never quoted the correct price of trades so the actual commission worked out to around 3% at times. It was pathetic.