Porinju Veliyath Mints Fortune From Note-Bandi Crises As Fav Stocks Surge

Demonetization & cashless regime turn e-governance stocks into red-hot favourites

One man’s poison is another man’s food, some great man said.

We could see this play out on 8th November when NAMO announced the historic decision of demonetization and the ushering in of a new cashless economy.

The market sank like a stone over worries that demonetization would cripple the economy. Most investors were wringing their hands in despair.

However, Porinju’s eyes were sparkling and his mind was racing. His brilliant investing mind immediately realized that there is a section of companies in the stock market which would prosper immensely from the note-bandi crises and the cashless regime, namely, the e-governance stocks.

E-governance stocks have hitherto been languishing due to investor apathy. Their dependence on the Government for orders coupled with wafer-thin margins and long delays in realizing dues from the customers, have not endeared them to investors.

One can see evidence of this in the value-pickr forum. Though some renowned experts like Hitesh Patel tried to spark interest into the stocks, not many paid attention and the discussion withered into silence.

However, overnight, the emphasis of the Government on a cashless regime means that e-governance stocks of all types have become red-hot favourites.

“Even beggars will carry credit card swiping machines,” Modi joked, to emphasize how pervasive the cashless regime will become.

Buy call given in September 2016

Porinju appears to have foreseen that a cashless regime will be ushered into the Country sooner or later and that the time is ripe to buy e-governance stocks.

We have a dozen e-governance stocks listed. Looks like an inflection point for this futuristic biz. I have been buying few of them.

— Porinju Veliyath (@porinju) September 30, 2016

That was a timely Idea on E-Governance stocks – up 40 to 100% in 2 weeks! @_nirajshah @nikunjdalmia pic.twitter.com/hhcIMjAYHF

— Porinju Veliyath (@porinju) December 5, 2016

“I have been looking at egovernance companies. We have may be 10-20 e-governance companies but those companies were going through some tough time because the environment is still not ready but I think going forward these companies are at an inflection point. They have built some business model, infrastructure, they have great people and some of them may be from Hyderabad,” Porinju stated.

“Some of these companies can be multibaggers going forward,” he added with a big smile on his face.

Porinju acted on his own advice. He bought 59220 shares of Cosyn on 21st September 2016 at the throwaway price of Rs. 81.57 each.

Multibagger stocks are at an inflection point

Porinju’s statement that some of the e-governance stocks are at an inflection point and can become multibaggers going forward has proved to be prophetic.

All e-governance stocks have been on fire over the past four weeks as investors are making a desperate no-holds-barred bid for these stocks.

That was a timely Idea on E-Governance stocks – up 40 to 100% in 2 weeks! @_nirajshah @nikunjdalmia pic.twitter.com/hhcIMjAYHF

— Porinju Veliyath (@porinju) December 5, 2016

small tech/ software cos surge
Vedavaag up 17%
Nucleus software up 7%
Cybertech up 5%

— Varinder Bansal (@varinder_bansal) December 6, 2016

ABM Knowledge surging now – moved 10% in last last 10 minutes https://t.co/48c7fqlxMX

— Varinder Bansal (@varinder_bansal) December 6, 2016

QuickHeal surges now…up 7% now https://t.co/bqTfNMDBQK

— Varinder Bansal (@varinder_bansal) December 6, 2016

Nucleus Software to @CNBCTV18Live
Have developed worlds first offline payment solution; helps to connect rural areas for e-payments

— Varinder Bansal (@varinder_bansal) December 6, 2016

Ramesh Damani also recommended new-age tech stocks

Ramesh Damani also foresaw great potential in new-age e-governance stocks.

“There are a lot of companies catering to vertical markets, building products in knowledge, database, antivirus. They offer some very attractive opportunities to investors and they are available at fairly cheap valuations” Damani said.

“There are maybe half a dozen on Dalal Street now that have exciting balance sheets, exciting prospects, and probably deserve a lot of investor attention” he added.

Ramesh Damani also referred to a company building the Aadhar database, which he called a “huge technological achievement”.

Other investors also mint fortune

It is notable that Porinju was not alone in figuring out that e-governance stocks would prove to be a gold-mine. A few other astute investors also figured this out and are now basking in great riches.

Big e- governance contracts are being worked out by various state governments and corporates! The sector to bank upon . https://t.co/BzFqxmkiOP

— Rakesh Laroia (@r_laroia) December 2, 2016

We have been discussing Vedavaag & Cosyn being beneficiary of Digital India theme and both are up 15%+ @r_laroia https://t.co/DxI3rNqgjm

— Ravi Jain, CFA (@ravijain88) December 2, 2016

Both stocks are up 30-50% in just one week time. Vedavaag may issue shares/warrants to promoters. https://t.co/wVfuyAgdGe

— Ravi Jain, CFA (@ravijain88) December 6, 2016

Good to see Cosyn & Intense Tech hitting 52 week highs(up 17-20%) today on hefty volumes!#ThematicStocks https://t.co/65rpblEwTw

— Rakesh Laroia (@r_laroia) December 5, 2016

Conclusion

Prima facie, it appears that these are still early days for e-governance companies and that a bright future lies ahead of them. We need to research these stocks in depth ASAP and give them pride of place in our portfolios!