PMS earns 35% CAGR
First, we have to compliment Ayesha Faridi, the charming editor of ET Now, for knowing what questions to ask and how to ask them.
“What is the kind of return that you have made,” Ayesha asked bluntly, fixing Basant with a steely gaze which made it clear that she would not take no for an answer.
Basant appears to have anticipated the question.
“… post fee returns on the AUM weighted thing which our custodians do for us that is 35%,” he replied with a gentle smile on his lips and a glint of pride in his eyes.
The hefty gains are not surprising given that Basant is/was “super bullish” about housing and micro finance stocks and was buying them aggressively when they were available at throwaway valuations during the demonetisation crises.
PMS net worth soars to Rs. 82.68 crore
Basant’s PMS Fund is having no trouble attracting deep pocketed clients in view of the stellar returns being churned out by him.
As of 31st January 2017, the PMS has roped in 84 individual clients (including three NRIs) who have invested Rs. 82.68 crore. This means that the average investment by each subscriber is Rs. 98 lakh.
Surprisingly, there are no corporate clients in the PMS.
Porinju Veliyath’s Equity Intelligence PMS’ net worth soars to Rs. 684.42 crore
Porinju Veliyath has also put up a strong showing when it comes to his PMS called ‘Equity Intelligence’.
The net worth of Equity Intelligence stands tall at Rs. 684.42 crore. There are 1136 clients in the PMS which includes 325 non-residents and 10 corporates. The average ticket size is Rs. 60 lakh.
There were some doubts amongst Porinju’s followers regarding the returns that the PMS has been able to churn out.
Porinju came clean and provided important clarification:
Thought of clarifying PMS performance, as I noticed many people attempting to mislead investors. Expecting Q4 to contribute significantly😀 pic.twitter.com/S3KKVZxXRH
— Porinju Veliyath (@porinju) January 16, 2017
Kenneth Andrade’s Old Bridge Capital rakes in Rs. 690 crore
Kenneth Andrade is also turning out to be a force to reckon with. His PMS called Old Bridge Capital has already raked in an AUM of Rs. 690.09 crore. This is quite commendable when we bear in mind the fact that the PMS has been formed recently.
Old Bridge Capital has 402 clients of which 73 are corporate. The average ticket size per client is Rs. 1.71 crore.
Old Bridge reported a gain of 4.96% as at the end of January 2017 on a weighted average basis for all clients.
PNB Housing Finance will do “tremendously well”
Basant’s fascination for housing finance companies is well known. He has famously called them “blind buys” in his earlier interviews.
However, Basant has shifted his loyalties from Repco Home Finance and Gruh Finance to PNB Housing Finance and Can Fin Homes Finance.
Basant came out with all guns blazing in favour of PNB Housing Finance. He gave three cogent reasons why the stock is a solid buy:
(i) Stock is growing at 40% CAGR:
Basant explained that there is a world of a difference between a stock growing at 20% and another growing at 40%.
“the difference between 20 and 40 is like a distance from earth to the moon,” he emphasized in a dramatic fashion.
“The 20% growers are good, 25% growers are very good, 30% ones are brilliant and 40% growers are extraordinarily wonderful,” he added.
(ii) Stock will beat analysts’ projections:
Basant explained that PNB Housing is earning 18-19% ROE for FY18 on its book value. He pointed out that the kind of profit it generates, its’ geographical diversification and low cost of capital means that it will beat most of the estimates made by analysts.
(iii) Large institutional investors will want a slice of PNB Housing:
Basant gave yet another glimpse of his brilliant tactical thinking ability. He explained that if PNB Housing consistently reports good returns, it would not be long before mutual funds and other big ticket investors want to give it pride of place in their portfolios. Obviously, if that happens, the stock price will rocket into the stratosphere.
“PNB Housing should do phenomenally well,” Basant proclaimed with his typical confidence.
Hefty gains are already pocketed by Basant from both stocks
Basant revealed that he bought PNB Housing “first day first show”.
The stock was listed on 7th November at about Rs. 890 per share. Assuming Basant paid that price, he is already richer by 25% for an investment of just a couple of months.
Can Fin Homes has given even more spectacular gains. Basant revealed that he bought the stock in 2005. If so, Basant is sitting on gains of nearly 300%.
“Can Fin Homes has saved our Titanic from sinking whenever we hit an iceberg over the last one-and-a-half years,” Basant chuckled with obvious delight.
Block buster Q3FY17 results by PNB Housing Finance
Basant’s confidence in PNB Housing Finance appears to be justified if one goes by the robust Q3FY17 results.
|PNB HOUSING FINANCE LTD – KEY FUNDAMENTALS|
|MARKET CAP||(Rs CR)||18,554|
|EPS – TTM||(Rs)||[*S]||28.61|
|LATEST DIVIDEND DATE||–|
|BOOK VALUE / SHARE||(Rs)||[*S]||324.81|
[*C] Consolidated [*S] Standalone
|PNB HOUSING FINANCE LTD – FINANCIAL RESULTS|
|PARTICULARS (Rs CR)||DEC 2016||DEC 2015||% CHG|
The profit surged 52.6% to Rs. 137.8 crore versus Rs. 90.3 crore (YoY). The NII surged to Rs. 264.5 crore versus Rs. 188.6 crore (YoY).
— Amitayu Ghosh (@amitayu_ghosh) January 24, 2017
Strong set of no's from PNB Housing!
Only 35 lakh shares(2.5%)with public rest 16 cr with Promoters n FII/DII's. https://t.co/pCu2J6FKGJ
— Rakesh Laroia (@r_laroia) January 24, 2017
Sanjaya Gupta, the MD of PNB Housing Finance, promised to maintain the NIM at 3% in the future as well. He also assured that the average yield for the company which is presently at 8.75-8.8% would be maintained.
LAP of Rs. 300 crore
PNB Housing Finance has announced that it will invest over Rs 300 cr in Parinee Group’s commercial project.
Parinee I is an iconic Grade A Office complex being built on approximately one acre of land parcel in Andheri West. The project is schedule to be completed by 2018 and will have an area of five lakh sq feet. It features a first-of-its-kind dichroic glass façade.
Parinee Group has completed almost 1.5 million sq.ft. of commercial and residential projects since its inception and has crafted landmarks such as Parinee Crescenzo in Bandra Kurla Complex.
Currently, it is developing projects totalling to 2.5 million sqft at Worli, Khar West, Andheri West, Juhu, Kandivali West and Borivali West.
— PropTiger.com (@proptiger) January 24, 2017
PNB Housing – Good to see it from 800 levels to cross 1100 levels in 2 weeks ! Value is getting recognised now .
— Rakesh Laroia (@r_laroia) February 10, 2017
Vijay Kedia and Dolly Khanna are also bullish about HFCs
I have earlier diligently reported that even Dolly Khanna and Vijay Kedia have joined Basant’s camp and declared confidence in housing finance stocks (see After Dolly Khanna, Vijay Kedia Recommends Buy Of Basant Maheshwari’s “Blind Buy” Stocks)
In fact, Vijay Kedia has gone to the extent of calling the housing finance sector “the next market leader”.
In my view, 'Housing Finance' sector could be the next market leader.
— Vijay Kedia (@VijayKedia1) January 30, 2017
In the light of the unanimous bullishness of all the savvy investors with regard to the housing finance stocks, there is no reason why we should remain mute spectators. We should also tuck into our own favourite HFC stocks and wait for the gains to gush into our portfolios!