Seven Things to Learn from Scam 1992: The Harshad Mehta Story

Radha Sapkota

These days, everyone has been binging on Scam 1992: The Harshad Mehta Story. The series has got such praise and attention from viewers that Harshad Mehta has been the talk of the town not only in India but also in Nepal.

Why is this series, approximately 10 hours long, so successful to make a mark on the mind of netizens? Furthermore, the rating of 9.6/10 by IMDB has proved that this series is worth watching not only for the capital market investors but also for all who want success in their doorway.

I too was intrigued while people were talking about this series. Thus, I watched its trailer on YouTube. The trailer was so promising that I could not resist my appetite for financial feeds and went ahead with the series. It was a great experience to watch the story of Harshad Mehta and learn about the scam. The story of the rise and downfall of “The Big Bull” of the Indian stock market somehow leads one to be fond of his genius, if we set aside the fact that he was involved in fraudulent activity of such a scale (though the loophole was already exploited by others before him.)

There are many events and dialogues in the story plot that can inspire someone to look for great things that matter in life. However, the movies, books, or series based on true events cannot reflect everything with 100% accuracy. There are limitations as to whose perspective the creator will take. Scam 1992 is also not an exception. Thus, I had to research through YouTube to get the actual measure of the intensity of this scam.

Keeping these things apart, I have handpicked seven lessons that I learned from the life story of Harshad Mehta in Scam 1992.

1. The biggest risk is in not taking the risk

The dialogue “Risk hai toh Ishq hai” has been the all-star line from this series. And why wouldn’t it be? Had Harshad Mehta not taken the decision to enter the stock market, he would not have made his way to the height of success. His decision to take risks by entering the stock market, starting his own company, and eventually entering the money market led him to success and being called “Bachhan of the stock market”. This lesson is useful for all the people (especially entrepreneurs) who are playing safe in their life and avoiding the risk. We are all capable of living greater lives, but only if we take the risk.

2. When everyone is busy in the game, keep an eye on the field

The ability to understand the whole system was his prime strength which he used to its fullest. The loopholes in the system were such that Harshad could identify them before others and take advantage of it. He used to keep an eye on the happenings of the economy and direct his investment strategies accordingly. One can witness this in the series when he was doing insider trading, or while using his replacement cost theory, and utilizing the settlement window period, or paying tax in advance to curb the eye of regulatory bodies. Outsmarting the bear operators was possible because he was aware of the happenings in the market and was steps ahead of them.

3. Learning anything is possible if one really wants

Learning never ends. So was the case with Harshad Mehta. He had zero knowledge of the stock market but he learned it. Similarly, his enthusiasm in the money market also grew more which he learned very soon. His fast learning behavior paved his path to success which was otherwise possible only for big industrialists, businessmen, or politicians.

Harshad's brother Ashwin Mehta was also a good learner. Ashwin Mehta had made himself proficient in law when Harshad was in custody so that he could defend his brother and their company. Coming from Gujrat, Harshad could exercise his learning from his father’s failed business and the odd jobs he took before entering the stock market which made him a threat to the big players back then.

4. Metaphors are really helpful to make complex stuff simple

A new phenomenon is complex to comprehend. If we use some simplifying methods to understand the fact, we can know the gist of it. The series shows how Harshad could simplify the financial jargon and understand them in his own terms, using metaphors. Similarly, he could communicate those ideas confidently to potential investors and institutions. His simplification style helped him keep everyone on the same page, which eventually helped him to expand his business.

5. Greed digs its own grave

The dialogue “It takes time to build business and timing to destroy it all” reveals the meaning of this lesson. Harshad was soaring with unimaginable success. He had the trust of many people. However, he fell victim to his own greed. He crossed one line after another and eventually did something that identified as a scam.

Once the news of the scam became public, he lost all that he had, including the trust of the people. The entire Indian stock market and the banking sector of India was affected by it. Only if he had set his own limits, his life would not have got a tragic ending in jail. His deeds also led his family to suffer. In fact, Ashwin Mehta is fighting numerous legal allegations to this day.

6. People generally make mistakes when guided by emotions

This is an important lesson from the life of Harshad Mehta. Emotions guide people to make blatant mistakes in business. Harshad tried his best to not allow emotions to control his decisions. His decisions were mainly based on facts and research. This lesson should be adapted by many people who invest in the stock market because many of the times, people's fear and greed seem to be controlling them. This lesson applies in life, and not only in the stock market.

7. Researching and the art of selling are the never-fading skills in business

After his completion of B. Com, Harshad did jobs mostly related to sales. This gave him experience in negotiating and selling an idea. Despite not having a lot of money, he was making profits in the market in the early days because of his extensive research of the market and his impeccable art of selling his idea.

The series shows how he could pitch his idea of replacement cost theory to many of the companies like Associated Cement Company (ACC) and inflate the stock price. Similarly, he could also manipulate the records in prestigious banks like the SBI, issue fake bank receipts for ready-forward deals between the banks, etc. Though not everything was ethical, we cannot ignore that selling is the most required skill nowadays for business people and everyone else.

No doubt that Harshad Mehta did wrong deeds because of greed. However, one cannot ignore his aptitude to identify the loopholes in the banking and financial system and utilize it. This has made people fond of his intelligence despite the scam he insinuated. Many financial reforms happened in the Indian economy after the scam of 1992.

Wrapping Up

It feels tragic that Harshad was the most accused person in the scam while there were other hands too behind it. My personal take on his story is that Harshad Mehta deserves more respect towards his genius mind than the distaste for his coups. This is my personal opinion after watching the series and going through other sources of information. However, I’m strongly against any wrong deed that affects the common people in the economy.

Lastly, as a financial enthusiast and an investor in the stock market, I recommend all to first study the economy, market, sector, and company deeply before putting your money in the stock market. Following other’s "investment advice" can make one vulnerable under the pump and dump strategy of big players. If you have gained other lessons from Scam 1992 and the life of the real Harshad Mehta, feel free to share your thoughts.

Disclaimer: The author takes full credit and responsibility for the opinions presented in the article. This piece is edited by Sharesansar's media team to improve diction and flow, while keeping the original views intact.