Month and Year: Late June to Early July 1985
Liquid Capital: Rs.
52,000
By late June, my cash reserves sat at a healthy Rs.
52,000.
It was time to execute my primary financial strike for 1985.
I planned to use Rs.
25,000 of my capital to enter the stock market, keeping the rest liquid for emergencies and further real estate flips.
I sat across the desk from my boss, Rajesh, in his accounting shop in Sowcarpet.
The ceiling fan clicked rhythmically above us.
“Rajesh bhai,” I began, dropping a stack of bundled notes on the table.
Twenty-five thousand rupees.
“I want to take a position in Reliance Industries. Specifically, the ‘F’ Series partially convertible debentures.”
Rajesh stared at the cash, his eyes wide.
“Vijay, where did you get this kind of money? And Reliance? Dhirubhai Ambani is flooding the market with these debentures. Everyone is talking about it, but it’s volatile.”
“I earned it,” I said calmly.
“And I know exactly what Ambani is doing. The Union Budget presented by V.P. Singh earlier this year proposed corporate tax cuts. Ambani is using the F-Series debentures to raise massive capital to expand his petrochemical plants at Patalganga. The market is slightly dipping now due to the sheer volume of paper being issued, but the underlying asset value is exploding. I want to use the Badla system to leverage this 25,000 three times over.”
The Badla system was the Indian stock market’s indigenous forward trading and margin financing mechanism.
Before modern futures and options existed, brokers in Bombay and Madras allowed traders to carry forward their positions to the next settlement cycle by paying a Badla (carry-forward) interest rate.
Rajesh was stunned by my technical fluency.
“Three times leverage?
75,000.
The Badla interest rate right now is around 1.5% to 2% per month.
If the stock drops, you will be wiped out by margin calls.” “It won’t drop,” I stated with absolute certainty, fueled by my future knowledge.
To understand the sheer magnitude of wealth blue-chip Indian stocks generated, one only needs to look at the data from 1985 to 2026.
● Reliance Industries: In 1985, a Reliance share hovered around Rs.
130.
Over the next forty years, through relentless stock splits (e.g., 2:1 in 1997, 1:1 in 2017) and bonus issues, a single share bought in 1985 multiplied into hundreds of shares.
An investment of Rs.
10,000 in Reliance in 1985 would be worth tens of crores of rupees by 2026, not even counting the massive dividend payouts.
● Hindustan Unilever (HUL): The FMCG giant was trading at a nominal value of around Rs.
30 in 1985.
With continuous bonus issues (1:1 in 1987, 1:2 in 1991, etc.) and a stock split from Rs.
10 to Rs.
1 face value, the compounding effect made it one of the greatest wealth creators in Indian history.
● ITC (Imperial Tobacco Company): Trading at around Rs.
35 in 1985.
Known for its generous dividends and bonus history (1:1 in 1989, 1:2 in 1994, 1:1 in 2005), ITC became a foundational pillar for any long-term portfolio.
● Larsen & Toubro (L&T): The infrastructure behemoth.
A proxy for India’s physical growth.
Rs.
10,000 invested in L&T in 1985 evolved through splits and bonuses to become a multi-crore fortune by 2026.
● Tata Steel (TISCO): The backbone of the nation.
While highly cyclical, its long-term trajectory from a double-digit stock in the 80s, adjusted for massive splits (including a 10:1 split in 2022), delivered astronomical returns.
I explained my analysis of Reliance’s petrochemical expansion to Rajesh in excruciating detail, breaking down Ambani’s backward integration strategy from textiles to PTA (Purified Terephthalic Acid) to Paraxylene. New chapters come out on novelping . com first.
Rajesh listened, mesmerized.
Finally, he slammed his hand on the desk.
“You are either a madman or a genius, Vijay. I have seen brokers with twenty years of experience who can’t analyze a balance sheet like you. I will facilitate the Badla trade through my legacy broker connections. In fact, I am investing Rs. 10,000 of my own money alongside you.”
Transaction Details:
● Starting Liquid Capital: Rs.
52,000
● Allocated to Stock Market: – Rs.
25,000
● Remaining Liquid Capital: Rs.
27,000
● Stock Position: Bought Rs.
75,000 worth of Reliance F-Series Debentures /
Shares at approx Rs.
130 per share.
● Leverage Debt: Rs.
50,000 (Financed via Badla).
● Monthly Interest Liability: Approx Rs.
1,000 (at 2% per month on the borrowed 50k).
I had officially entered the capital markets.
The seeds were planted.
Now, I just had to wait for the harvest.