It is no secret that Prof. Sanjay Bakshi, the authority on value investing, is a believer in the realty sector. He has more than once expressed his fondness for Ashiana Housing and also disclosed that he holds the stock in his personal portfolio. He recently also bought a chunk of Podar Developers for the ValueQuest India Moat Fund.
Porinju Veliyath is also very vocal about his fascination for the beaten down realty sector. He confidently declared in October and November 2014 that DLF, the troubled real estate behemoth, is a “strong value buy” and that it would “double in 12 to 18 months”.
A few days ago, Porinju also shot off a tweet in which he left no doubt about where he is putting his money:
DLF@140, Ananatraj@43, Unitech@18, Ansal@27, OM Metal@37 etc. under-performed in FY14-15. I expect Realty stocks to out-perform in FY15-16
— Porinju Veliyath (@porinju) March 11, 2015
(DLF@140, Ananatraj@43, Unitech@18, Ansal@27, OM Metal@37 etc. under-performed in FY14-15. I expect Realty stocks to out-perform in FY15-16)
Well, today, Porinju lived up to his word. His fund, Equity Intelligence India Pvt. Ltd, scooped up a chunk of 55,000 shares of Ansal Buildwell Ltd at Rs. 64.25 each. The total investment is Rs. 35.33 lakhs.
Ansal Buildwell is an ultra micro-cap with a market capitalisation of only Rs. 50 crore. It has a number of real estate projects to its credit.
Its flag ship project appears to be “Sushant Lok-II/III” at Gurgaon, possession of which has been given. It has a number of other residential projects which are at an advanced stage of completion/ have been completed such as “Florence Residency”, “Florence Abode” etc.
Ansal Buildwell also has a stake in the commercial realty space in the form of “Boom Plaza”, a commercial complex in Sushant Lok-III. It is also implementing a commercial complex in ‘F’ Block, Sushant Lok-II named as “Florence Triangle”.
Porinju’s game plan in buying realty stocks is quite clear. In an earlier tweet, he indicated that India is the only major economy with interest rates peaking out and that the time is ripe for non-fancied stocks like DLF, Ansal, Om Metal, AnantRaj etc to claim their place in the sun.
Whether Porinju’s theory works out or not requires to be watched closely.