He ventured into stock markets at the age of 41, and now is counted among India’s super-investors. Starting off with very little capital, he now boasts of a portfolio value individual investors only dream about. It’s not just his networth, his achievement seems bigger than his networth number when you think about the unusual way in which he’s created wealth. Rarely do you come across investors who get rich investing in sugar and steel stocks. Commodities go through cycles, and even company managements often get caught on the wrong foot trying to time the expansions and end up destroying wealth. But our man has outdone most managements.
Welcome the most secretive of the Trinities of Chennai investment circles: Anil Kumar Goel. The other two -- Govind Parikh and Rajeev Khanna alias Dolly Khanna – maintain a low profile too, but Goel is the least known among the three.
They say your beginnings never know your ends, but Goel picked up the skills for his future calling as a value investor as a young lad in the family’s steel trading business. He had been initiated into it as a 16-year-old by his grandfather when he had come down to Chennai for his summer holidays in 1968. It would be another 24 years before he was to make his first trade in the stock market, but the steel business gave him ample opportunities to hone the art of buying low and selling dear.
“Sometime in the mid-70s, steel prices had crashed,” the 71-year-old Goel said in a conversation with Moneycontrol. "SAIL and TISCO (as Tata Steel was known back then) were unable to sell their wares. Their yards were filled with steel products, and they were offering hefty discounts. The manager at the SAIL’s Chennai plant called me and said: ‘We have this much material. Can you lift it?’. I told him ‘Sir, give it at my price and I will take it.’
They finally agreed on a price of Rs 1,200. For Goel, it was a steal, because the production cost itself was Rs 1600, and the product usually sold for Rs 2000.
“When you buy something at a throwaway price, I don’t see a risk. It is only patience that you require. You put in money and the cycle has to turn at some point,” Goel said, recalling the incident. This philosophy would form one of the key building blocks for his investment strategy he was to develop two decades later dubbed KCP LTD (more of that in the next story).
A chance conversation with the branch manager of the bank where he had his account got Goel started off on his stock market journey in 1992. Over the next three decades, he would go on to build a portfolio of around 80 stocks, majority of them commodity plays as that is an area Goel understands best.
As on September 30, the value of the 35 stocks in which Goel holds more than one 1 percent is around Rs 2,200 crore. His key holdings right now are Dwarikesh Sugar Industries, Triveni Engineering & Industries, Dhampur Bio Organics Mills, Dalmia Bharat Sugar and Industries, Dhampur Sugar Mills, TCPL Packaging, and Uttam Sugar Mills.
His journey over the last three decades has been quite eventful. In 1997-98 he came close to being forced out of the market when his bets on global depository receipts (GDRs) went sour. He missed out on the fantastic rally in IT shares in 1999-00 because of his idea of value, but he more than made up for it by spotting bargains in the middle of the dot com boom and then backing up his truck to load up on them.
His big bets right now are sugar and textiles. And he is candid to admit that despite coming from a steel background, his recent calls on the sector have turned out wrong.
And the gritty Goel is showing no signs of slowing down. He begins his day at 3 in the morning, and has maintained his exercise regime of an hour of yoga every morning for the last 42 years.
To read about Goel's journey, investment philosophy and learnings, click here
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