Harshad Mehta’s Net Worth Breakdown & Stock Market Saga

Harshad Mehta, a name that resonates with both admiration and infamy, was once hailed as the 'Big Bull' of the Indian stock market. His rise to fame was accompanied by a lavish lifestyle, but his fall from grace, marked by the infamous 1992 scam, remains one of the most talked-about financial scandals in Indian history.

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In this blog, we dive into Harshad Mehta's story, his luxurious residences, and the 1992 scam that left a lasting impact on India’s financial landscape.

About Harshad Mehta

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Harshad Mehta was infamously known for being involved in the widely known 1992 scam in India. His involvement in the 1992 Indian securities market scam gained him national fame for market manipulation. 

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He was charged with 27 criminal offences but was convicted of only four before he died in 2001. Mehta was 47 years old when he passed away due to a heart attack.  

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He was born in the Rajkot district of Gujarat and grew up in Borivali, Mumbai, where his father worked as a small-time textile businessman. 

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Work Life

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At the beginning of his career, Harshad Mehta took on meagre jobs in various industries, like textiles, cement, and jewellery. He started his career as a salesman at New India Assurance Company Limited (NIACL). 

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During his time at NIACL, he developed a deep interest in the stock market and shortly quit his job thereafter. Mehta joined a broking firm called Harjivandas Nemidas Securities and worked under Prasann Pranjivandas. 

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Harshad Mehta considered Prasann Pranjivandas as his “Guru” (mentor). From 1980 to 1990, he worked at multiple broking firms, assuming advanced responsibilities. 

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After a decade of hustling, he became a prominent name in the Indian securities market. News agencies and media outlets started calling him “Amitabh Bachchan of the Stock Market”.

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In 1986, Harshad Mehta founded Grow More Research and Asset Management with the financial assistance of associates. By 1990, his firm began receiving investments from well-known individuals who were happy to avail themselves of his services.

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The price of shares in the cement industry rose sharply from ₹200 to ₹9000 due to heavy buying from a group of brokers, including Mehta. He used the so-called "replacement cost theory" to defend his excessive trading in ACC shares. 

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He claimed that the stock had been undervalued and that the market had simply corrected when it revalued the company at a price equal to the cost of constructing a comparable business.

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Inside Harshad Mehta’s Luxurious Homes

1. Madhuli Apartments, Worli

At the peak of his career, Harshad Mehta lived in a lavish 15,000 sq. ft. penthouse in Madhuli Housing Cooperative Society, Worli, Mumbai. This upscale neighborhood is known for its proximity to the Arabian Sea, making it a sought-after location among high-profile personalities. Harshad Mehta's home was no ordinary residence; it was a symbol of his immense wealth and opulence.

The penthouse featured:

• A billiards room
  
  
• A mini-theater
  
  
• A mini-golf course
  
  
• A swimming pool
  
  

The property offered panoramic views of the Arabian Sea and the city skyline, reflecting the lifestyle that Harshad Mehta led before his downfall. His residence became synonymous with success, drawing attention from the media and the public alike.

2. Vandana CHS, Juhu

In addition to his Worli penthouse, Harshad Mehta owned two sea-facing apartments in Vandana Cooperative Housing Society on Janki Kutir Road, Juhu. Each apartment spanned 1,150 sq. ft. and provided stunning views of the sea. These apartments were eventually seized and auctioned after the 1992 scam, with the proceeds directed toward clearing dues owed to tax authorities and banks.

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The 1992 Security Fraud Scam

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The 1992 scam, also known as the Harshad Mehta scam or the 1992 securities scam, was one of the largest financial scandals in India.

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Harshad Mehta, who had gained prominence in the stock market for his incredible investments and success, was found to be at the center of an elaborate scheme that manipulated the stock market.

Mehta exploited loopholes in the banking system, using fake bank receipts to secure funds, which were then used to artificially inflate stock prices. Notably, the price of ACC stock skyrocketed from ₹200 to nearly ₹9,000, creating an illusion of profitability.

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However, when the fraud was exposed, the stock market crashed, resulting in significant losses for investors and banks. This scandal rocked the Indian financial system, leaving a lasting mark on the country’s stock market regulations.

The scam was exposed by journalist Sucheta Dalal, who uncovered how Mehta and his associates had manipulated the system. His arrest and the subsequent media coverage brought the scandal into the national spotlight.

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Harshad Mehta exploited the loopholes in the banking system to manipulate stock prices and drain around 4000 crore from the banking system.

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Mehta used a method called ‘Ready Forward’ (RF) deals, which is using government securities for short-term loans between banks. He used fake bank receipts to lend him money, which he put into the stock market to artificially inflate stock prices.

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As the stock prices rose sharply, Mehta began selling off his shares to gain massive profits. However, the scam quickly started to unravel as the State Bank of India (SBI) figured it hadn’t received securities against the funds that were lent to Harshad Mehta.

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Once the investigations began, the stock market collapsed, and Indian investors and banks faced huge losses. 

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Ultimately, Harshad Mehta was charged with 27 criminal charges; however, he was arrested for only 4 of those charges. He died in 2001 due to a heart attack while his trial was still ongoing.

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The scam exposed several flaws in the Indian financial system, resulting in regulatory reforms and the establishment of the Securities and Exchange Board of India (SEBI).

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What was Harshad Mehta’s net worth?

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According to reports, Harshad Mehta had an estimated net worth of ₹3,542 crore ($475 million) at the time of his death in 2001. His wealth was at its highest while he was at the peak of his stockbroking career.

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He had a collection of luxurious cars and several real estate properties spread across Mumbai.

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Before the scam, Harshad Mehta's net worth was estimated to be around $475 million, a fortune he amassed through his manipulation of stock prices and his savvy investments.

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Harshad Mehta net worth was a topic of discussion in the media, with many fascinated by the sheer scale of his wealth. His lifestyle included a collection of luxury cars, such as the Lexus LS400 and the Mercedes-Benz W126, and a penchant for expensive clothing and accessories.

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Harshad Mehta net worth was not just a reflection of his financial acumen but also a symbol of his extravagant lifestyle.

His wealth, which was once the envy of many, was built on his manipulation of the stock market. However, once the 1992 scam was exposed, his assets were seized, and his fortune crumbled.

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The once-prominent stockbroker’s Harshad Mehta net worth became a cautionary tale of ambition gone wrong.