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A law graduate who fell in love with equities, manages Rs 1250 cr portfolio – meet Porinju Veliyath

Kochi-based investor Porinju Veliyath's journey from an investor to Equity Intelligence, his firm which managed over Rs 1,200 crore worth of portfolio.

September 04, 2017 / 12:22 PM IST
Thejo Engineering: Porinju Veliyath-owned Equity Intelligence India bought 50,000 shares of Thejo Engineering at an average price of Rs 675.11. On the other hand, India Opportunities Fund sold 1,71,400 shares of Thejo Engineering at an average price of Rs 679.81.

Thejo Engineering: Porinju Veliyath-owned Equity Intelligence India bought 50,000 shares of Thejo Engineering at an average price of Rs 675.11. On the other hand, India Opportunities Fund sold 1,71,400 shares of Thejo Engineering at an average price of Rs 679.81.

A law graduate who found his love in equities back in the year 1990 is now one of the most influential small-cap stock pickers in the country today.

Kochi-based investor Porinju Veliyath's journey from an investor to Equity Intelligence, his firm which managed over Rs 1,200 crore worth of portfolio.

He likes to keep things simple when it comes to investing and does not shy away from investing in uncongenial ideas. He has already spotted many stocks which gave multibagger returns of up to 300 times.

He believes in Value Investing because it is all about Price and Value.

Few stocks which gave multibagger returns include names like Wockhardt (120), Orient Paper (6) Piramal Enterprises (340), Shreyas Shipping (20), Balaji Amines (100), Force Motors (400), Biocon (150) and Jubilant Life (300) are few past wealth creators under his PMS.

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FCEL (10), JBM Auto (170), L T Foods (20), DCM Shriram (120), Geojit (32), Federal Bank (45) and TCI (+TCI Xpress) @ 250 are some of the performers he still holds.

Here is an excerpt from his exclusive interview with Kshitij Anand of Moneycontrol:

Your qualification, age, size of your portfolio

A Law Graduate, I am 55 arithmetically – My firm, Equity Intelligence is a SEBI Registered Portfolio Manager since 2003; we manage over Rs 1,250 crore.

At what age you started investing in the market?

I didn’t have any capital to start investing at beginning of my equity career. In fact, it was not a ‘purchase’ that turned out to be a gold mine for me.

It was a ‘sell’ at the peak of 1992 which helped me own a 475 sq ft apartment in Mumbai suburb. I had short-sold SBI Magnum at Rs 165 while its NAV was 32.

The stock peaked out at 180, next day (23 April 1992) and fell sharply. I covered at near zero levels adjusted to the ‘badla’ gains in few months. In a bi-weekly settlement system, you could short-sell any stock and carry forward with the corresponding buyer with ‘white kapli’.

What is your investment philosophy or investment mantra?

‘Keep it simple’ is my investment mantra. I don’t have any hard and fast rules while picking stocks. I am very flexible and open to any ideas which could create wealth, including unconventional ideas. SEBI guidelines is the only ‘rule I follow while picking stocks’.

List of stocks which have already given multi-bagger returns and how much?

There are too many stocks which have already given multibagger returns. Wockhardt (120), Orient Paper (6) Piramal Enterprises (340), Shreyas Shipping (20), Balaji Amines (100), Force Motors (400), Biocon (150) and Jubilant Life (300) are few past wealth creators under PMS.

FCEL (10), JBM Auto (170), L T Foods (20), DCM Shriram (120), Geojit (32), Federal Bank (45) and TCI (+TCI Xpress) @ 250 are some of the performers we still hold.

What do you prefer the most – largecaps, midcaps or smallcaps/microcaps and why?

The size doesn’t matter in Value Investing! It’s all about Price and Value. I don’t care about the size of the company even if the ‘Value’ is significantly higher than the price.

Everyone knows the price; understanding ‘Value’ is name of the game! Every successful investor has evolved a unique style of estimating the value and picking stocks. It is very difficult to explain the process.

Where do you see markets in next 4-5 years?

Equity will continue to be most rewarding asset class in next 4-5 years. Indian economy is at an inflection point with significant structural changes.

The economy is shifting from black to white and unorganized to organized, which will benefit listed companies, as most of them are conducting business in an organized manner.

The not-so-professionally managed companies also will change for the benefit of minority shareholders due to improved governance and embrace of professionalism. After historic reforms like demonetization and GST, there won’t be any incentive to remain ‘chor promoters’, siphon out profits and avoid paying taxes.

Any top bets which could turn out to be a gold mine in next few years?

Our latest picks are GVK Power & Infra, Kaya Ltd, and Emkay Global – Equity Intelligence PMS owns over 5 percent of these companies.

They have many challenges currently and the numbers do not look impressive. We are betting on their potential to create shareholder wealth over next 5 years in the changing economic environment.

Who is your investment guru?

I don’t believe much in Gurus, Gods & Prophets – learning has no limits and it is a continuous process. It is better to keep your eyes and ears open because there are wonderful people around you.

I have been inspired by many personalities (friends & associates) like Uday Kotak, Chandrakant Sampat, Radhakishan Damani and C J George.

I have also been motivated by many ordinary people, my friends & colleagues. Learning is an art; books and Gurus are not very important.

What are your hobbies?

I enjoy farming and spend 2-3 days in a week at the farm. Apart from that, I love traveling too, just came back after a solo-trip to Scandinavian countries.

It is interesting to experience and learn about the history, culture, lifestyle, and economy of different countries. Sometimes you get inspired like the cycling habit of people in Copenhagen.

What books are you reading?

The latest book I read in full was Civil Procedure Code & Law of Limitation, 27 years ago. I have attempted to read many books but failed to go beyond 5-10 pages.

There is a good collection of books at home, as my wife and children read a lot. I read online, have subscribed to Economist but do not remember reading an article in full. Love to write and read on Twitter due to its 140-character limit.
Kshitij Anand is the Editor Markets at Moneycontrol.
first published: Sep 4, 2017 07:53 am

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