Ripley’s Believe It Or Not – Rags to Riches
The story of Ram Chandra Agarwal of V2 Retail reads like a story from Ripley’s Believe it or not.
The man has lost the use of both legs due to polio and cannot walk without the aid of a crutch on each side.
He hailed from a poverty stricken family and lived in a chawl. He worked as a low-level employee at a salary of Rs. 300 per month. Thereafter, he started a retail garments business by the name of ‘Vishal Retail’ which became so popular and so large that it was regarded as a strong contender to the throne occupied by Kishore Biyani’s Pantaloon Retail.
Riches to Rags
Ram Chandra Agarwal got carried away by his success. In a desperate bid to cash in on the popularity of Vishal Retail and rake in big bucks during the stock market boom of 2007, he borrowed heavily to set up facilities. Unfortunately, the Lehman crises happened in 2008 and the stock markets went into a tailspin. Vishal Retail went into insolvency because it could not repay its creditors and Ram Chandra Agarwal was back where he started – as a pauper.
Unbelievable grit and determination
A normal bodied person would have crumpled and given up. What can one expect from a physically challenged person who can barely walk?
The astonishing part is that Ram Chandra Agarwal did not give up. Instead, he restarted the retail business from scratch in the name of V2 Retail.
This time, Agarwal was careful to avoid the mistakes that he had made in Vishal Retail. He ensured that he did not over extend himself and calibrated his progress in a slow and steady manner.
Chamatkar Ko Namaskar!
One can sense the extent of Agarwal’s steely determination that when an eminent adviser opined that the “Agarwal’s background as a failure would dissuade investors and lenders”, he was not discouraged.
Instead, he uttered the prophetic words “Log chamatkar ko namaskar karte hai (people salute miracles). I have restarted the retail journey. The chamatkar will happen”.
In an interview of February 2012, Agarwal promised that “We’ll do it right this time” and set out a six-point agenda:
(i) No enormous investments or debts in the beginning
(ii) The total investment so far is only Rs 15 crore
(iii) Slower expansion to keep debt in check
(iv) Increase management bandwidth before expansion
(v) High degree of automation to reduce leakages
(vi) Online presence and plan to start e-commerce soon
Stock recommended by anonymous blogger
At this stage, we have to compliment the anonymous blogger known as aceinvestortrader.
In August 2014, when V2 Retail was languishing at a throwaway price of Rs. 14 and a market capitalisation of Rs. 33 crore, the blogger recommended a buy of the stock.
“At the CMP of Rs 14.9 and Market Cap of just 33cr, there’s very good value on the stock. The downside looks protected whereas upside could be humongous,” aceinvestortrader said.
“The results could be a game changer,” he added in a prophetic tone.
Incredible 10-Bagger gains in 24 months
It is unbelievable that today, barely 24 months since the blogger issued the buy recommendation, V2 Retail stands tall at Rs. 148 with a market capitalisation of Rs. 370 crore. This means that magnificent gains of nearly 1000% are on the table.
Scorching pace of growth
As aceinvestortrader rightly pointed out, the results have been the “game changer”. V2 Retail has been growing at a scorching pace in terms of the top line and the bottom line. It has demonstrated that it can replicate the success model of Vishal Retail but without repeating any of the mistakes that the latter committed.
|V2 RETAIL LTD – KEY FUNDAMENTALS|
|MARKET CAP||(Rs CR)||370|
|EPS – TTM||(Rs)||[*S]||3.44|
|LATEST DIVIDEND DATE||–|
|BOOK VALUE / SHARE||(Rs)||[*S]||115.53|
[*C] Consolidated [*S] Standalone
|V2 RETAIL LTD – FINANCIAL RESULTS|
|PARTICULARS (Rs CR)||JUN 2016||JUN 2015||% CHG|
(Source: Business Standard)
Multibagger stocks galore from the stable of aceinvestortrader
It is notable that both stocks were languishing at the time that aceinvestortrader recommended them and soon went on to become mega multibaggers.
Porinju Veliyath also spots the opportunity in V2 Retail
At this stage, we have to compliment Porinju Veliyath as well for his keen eye in spotting multibagger opportunities.
On 22nd June 2015, he bought a massive chunk of 126,459 shares of V2 Retail in the name of ‘Sunny Veliyath Porinju’ at the price of Rs. 39.54 each. The total investment was Rs. 50 lakh.
The stock is up a magnificent 252% since then.
Has Porinju Veliyath sold off his holding in V2 Retail?
Prima facie, Porinju appears to have sold off all or a major part of his holding in V2 Retail before 31st March 2016. One can draw this inference because the last person in the list of top-10 shareholders of V2 Retail as of 31st March 2016 holds 67,418 shares. If Porinju would have continued to hold his quota of 126,459 shares, he would have figured quite high in the list of major shareholders.
D-Mart IPO may send V2 Retail soaring?
The punters at MMB also deserve to be complimented for their sharp thinking. They are already laying bets that the proposed IPO of D-Mart, the successful retail chain run by legendary Billionaire investor Radhakishan Damani, will result in a “re-rating” of the entire retail sector and send V2 Retail soaring into another orbit. Whether this will in fact happen or not requires to be seen.
Ram Chandra Agarwal’s achievements are very inspiring to us. The way that he overpowered his physical challenge to create a massive empire from scratch – not once but twice – is very inspirational indeed. It shows that no task, howsoever difficult it may appear, is impossible if one has the grit and the determination to accomplish it!