The only Indian billionaire to get richer under virus lockdown

Only one Indian tycoon's net worth remained unscathed as the deadly coronavirus roils markets worldwide and the shares of his Avenue Supermarkets have advanced 18 perent this year.

All thanks to the nation's hoarders who stockpiled on staples amid the world's biggest isolation effort.

The net worth of Radhakishan Damani, who controls Avenue Supermarts Ltd., has surged 5 percent this year to $10.2 billion, singling him out as the only billionaire with gains among the 12 richest Indians whose wealth is tracked by the Bloomberg Billionaires Index, Bloomberg reports.

Raised in a one-room apartment in a Mumbai tenement block, Damani saw his wealth swell at a time when a stocks rout has shaved more than 32% off the net worth of his billionaire compatriots Mukesh Ambani and Uday Kotak on fears that the pandemic will gut economic growth.

Damani's supermarket chain, known for its thrifty cost structure, gained from panic buying of household essentials after India decided to place its 1.3 billion people under a three-week lockdown last month.

"People have been buying in panic and hoarding during the lockdown that drove the sales, making the company's share a perfect hedge amid rout," Arun Kejriwal, director at Kris, an investment advisory firm in Mumbai.

"Their unique no-frills model and also choosing to operate from locations outside malls, will help them to tide over the situation," he added.

The low-cost model will hold Avenue Supermarts' D-Mart stores in good position even after the panic hoarding for staples cools down once the lockdown is lifted as the chain makes money by giving customers fewer choices of no-frills products, negotiating hard with its vendors and avoiding any advertising expense.

D-Mart's rivals have not benefited as much under the same circumstances.

Future Group, which runs India's second-largest retail chain by revenue, saw shares of its publicly-traded retail unit nosedive 80% this year amid mounting debt woes.

Avenue Supermarts' and Damani's prospects are bright as long as the supply chain for India's fast-moving consumer goods is not disrupted. With trucks coming to a near-standstill, any extension of the lockdown can potentially empty out D-Mart's shelves.

For now, Damani's stores are managing to refill their racks.

There are very few listed retailers that are better placed than Avenue Supermarts to offer "a hedge in this crisis," said Vikraman PN of Finnoviti Consulting Pvt adding "They cater to the rising demand for consumer staples and they have used their cash flows over the years to invest in a robust supply chain."