Month and Year: December 1985
Early December arrived, and with it came the finalization of our bureaucratic nightmare.
The paperwork for Lakshmi Traders took nearly two full months to complete, even with Vikram’s insider knowledge and targeted bribes.
Finally, we held the sacred documents: the Importer Exporter Code (IEC) from the DGFT and the necessary foreign exchange clearances from the RBI.
We were legally authorized to import polymer granules into India.
But importing requires massive capital, especially for the Letter of Credit margins.
I had forty-six thousand rupees liquid, but I needed a much bigger war chest to make a real impact.
I had been waiting patiently for my Reliance trade to mature.
Back in July, I had used twenty-five thousand rupees of my own money, taken a fifty thousand rupee margin loan via the Badla system, and bought seventy-five thousand rupees worth of Reliance F-Series debentures/shares at approximately one hundred and thirty rupees per share.
That gave me an exposure of roughly five hundred and seventy-six shares.
In mid-December, exactly as my historical memory remembered, the market realized the sheer genius of Dhirubhai Ambani’s Patalganga petrochemical expansion.
The corporate tax cuts from the Union Budget kicked in, and institutional investors flooded into Reliance.
The stock price didn’t just rise; it exploded.
Over a frantic two-week period, the stock shot up from the 130s, tearing past 200, breaching 300, and finally peaking at around 375 to 380 rupees per share.
The trading floors in Bombay and Madras were absolute bedlam.
I was sitting in Rajesh’s accounting shop in Sowcarpet when the legacy broker from Kothari & Sons, Natarajan, called us on the landline.
“Rajesh! Tell your boy genius the stock is at 375! What do we do?” Natarajan yelled over the roar of the trading floor in the background.
“Sell it all,” I said calmly, taking the receiver.
“Dump the entire position right now.”
“Are you sure? It might hit 400!” Natarajan argued.
“Bulls make money, bears make money, pigs get slaughtered, Sir. Sell it at 375,” I commanded.
Natarajan executed the trade.
The feeling of absolute triumph washed over me.
The math was beautiful.
The Reliance Trade Breakdown:
● Total shares held via margin: 576 shares.
● Selling Price: Rs.
375 per share.
● Gross Revenue: Rs.
● Repayment of Badla Principal: Rs.
50,000.
● Badla Interest (5 months at 2% per month on 50k): Rs.
5,000.
● Brokerage Commissions and Fees: Rs.
2,900.
● Net Revenue returned to me: Rs.
158,100.
● Original Capital invested: Rs.
25,000.
● Pure Profit: Rs.
133,100 (approximately ten thousand six hundred USD).
Rajesh was shaking when the final settlement sheet arrived.
He had invested ten thousand rupees alongside me, buying roughly seventy-seven shares.
His shares sold for twenty-eight thousand eight hundred and seventy-five rupees.
After paying his own margin interest, he netted a pure profit of over fifteen thousand rupees.
Tears were in Rajesh’s eyes.
“Vijay… I have worked in this market for ten years. I have never seen a trade executed with such absolute, terrifying precision. You really are a genius vijay.”
He opened his safe and pulled out a stack of cash.
“You convinced me to do this. You guided the trade. Thirty percent of my profit is yours. It is the rule of the market.” He handed me four thousand five hundred rupees.
I accepted it graciously, adding it to my pile.
I took my massive windfall directly to my uncle Ragu at the Indian Bank branch, depositing it into my current account under heavy guard.
My uncle looked at the deposit slip, went completely pale, and simply stamped it without saying a single word.
He knew better than to ask.
December Year-End Liquid Capital Update:
Starting Capital: Forty-six thousand rupees.
Reliance Net Revenue (Principal + Profit): One lakh fifty-eight thousand one hundred rupees.
Rajesh’s Commission: Four thousand five hundred rupees.
I was officially a wealthy man by 1985 standards.
Now, it was time to deploy it.
I went to the Ambattur office and sat down with Vikram.
“We have the capital. Initiate the import sequence for ten metric tons of HDPE polymer granules.”
Vikram nodded, pulling out the telex transcripts.
“I have located a prime supplier in Hong Kong. The price there is rock bottom.”
Hong Kong was the ideal market because it operated as a free port and a massive petrochemical transshipment hub for goods coming out of mainland China, Taiwan, and Japan.
There were no import tariffs, making the base cost of granules incredibly cheap compared to the heavily taxed Indian domestic market.
“To secure the shipment, the Hong Kong supplier requires a Letter of Credit (LC) from a reputable international bank,” Vikram explained.
“HSBC (Hongkong and Shanghai Banking Corporation) is the standard. I can leverage my old Citibank contacts to get the LC routed through standard corresponding banking channels, but the bank will require us to put down a cash margin to issue the LC. Usually, for a new company, it’s a hundred percent.”
“Use your contacts to get it down to twenty-five percent,” I instructed.
“Show them our RBI clearances and our liquid cash balance. We will lock in twenty-five percent of the shipment value in a fixed deposit with the issuing bank as collateral for the LC.”
The mechanism of a Letter of Credit was simple but vital.
It guaranteed the Hong Kong supplier that they would be paid by our bank once they provided shipping documents proving the goods were loaded onto a vessel.
It protected us by ensuring no money left our account until the goods were actually shipped.
“There’s one more thing,” Vikram said.
“This is our first international deal. The Hong Kong brokers are notoriously tricky with new Indian clients. They might ship us low-grade recycled granules instead of virgin HDPE. Someone needs to be there to inspect the cargo before the LC is finalized.”
I smiled, pulling a small blue booklet from my bag and tossing it on the desk.
“I know. That’s why I applied for my passport three months ago through a fast-track tatkal contact.”
Vikram looked at the passport, stunned.
“You are going to Hong Kong?”
“Yes,” I said, looking out the window at the bustling industrial estate.
“Book the tickets. We are taking this international.”
The year 1985 was ending.
I had started with 120 rupees.
I was ending the year with over two lakhs in liquid cash, a registered trading company, a loyal manager, a martial arts foundation, a growing political network in college, and a flight ticket to Hong Kong.
The framework of the business conglomerate was set.