AUM of Equity Intelligence PMS Fund surges to Rs. 1000 crore
First, we have to compliment Porinju because he has achieved the enviable task of increasing the net worth of his PMS fund to an eye-popping Rs. 1,000 crore.
Porinju himself announced this amidst much fanfare from his army of followers.
1000 Cr AUM – it was my dream few years ago! Thank you investors, colleagues, friends and well-wishers!
— Porinju Veliyath (@porinju) May 17, 2017
Porinju’s incredible story of rags to riches inspired many in his army of fans to think that they can also reach such heights some day.
@porinju Your First Salary was 1000 p.m, makes this figure all the more Significant and Laudable……
— nikhil kapoor (@nikhprr) May 17, 2017
— Dipesh Jain (@djjain5) May 17, 2017
@porinju Hearty congrats Porinju ? Glad to know that you achieved your dream. I am also benefitted. Learned value investing from you. Thanks.
— davisittoop (@davisittoop) May 17, 2017
@porinju Proud to be a beneficiary of the journey, wisdom, perseverance and uncluttered intelligence! Inspirational!
— Vishnu Prasath (@niceVishnu) May 17, 2017
@porinju Congratulations ! time for a new dream 🙂
— Ankit (@leoankit) May 20, 2017
@porinju Congratulations Sir. We believe you that you make our dreams true as well.
— Mallik Rao (@RaoMallik) May 17, 2017
@porinju Would love to get your reply!!!! Whenever I hear you on TV I just love The way you narrate about India's growth and the potential india has!
— Moulik Shah (@maulikshah0711) May 17, 2017
Large client base in the Equity Intelligence PMS
A study of the details of the PMS as of 30th April 2017 reveals that 1,241 individuals (including 359 non-residents) contributed Rs. 906.92 crore to the kitty.
This makes the average contribution Rs. 73 lakh per head.
There are seven corporate clients who have contributed Rs. 12.28 crore to the PMS.
The astonishing aspect is that investors have flocked to Porinju’s PMS in droves despite the fact that he has been very liberal in revealing the portfolio of the PMS and offering stock recommendations.
No doubt, the impressive return of 42% delivered by the Equity Intelligence PMS Fund in FY 2016-17 has enticed investors.
Other PMS Funds are also raking in big bucks
Kenneth Andrade’s Old Bridge Capital PMS Fund has also become a force to reckon with.
As of 30th April 2017, Old Bridge has an AUM of Rs. 839.65 crore.
There are 369 individuals who have contributed Rs. 688.16 crore, making the average ticket size Rs. 1.86 crore.
Prima facie, it appears that these are HNIs given the high individual contribution.
Old Bridge also has 80 corporate clients who have pumped in Rs. 151.49 crore. The average here is Rs. 1.86 crore.
It is notable that Kenneth Andrade has invested Rs. 56.66 crore in Mutual Funds. This indicates that he is anticipating a correction and/ or awaiting the opportune moment to deploy his funds.
Basant Maheshwari’s PMS is also growing by leaps and bounds.
As of 30th April 2017, the AUM stands at Rs. 125.19 crore. There are 96 individual clients (including 4 non-residents) who have invested an average of Rs. 1.30 crore.
There are no corporate clients in the PMS.
It is notable that the growth in Basant’s PMS is on the back of the impressive return of 35% delivered by him in FY2016-17.
Basant has also generously revealed the names of the stocks that he is “super, super bullish about” so that novice investors who cannot afford to participate in the PMS can also benefit.
Narendra Modi is the biggest multibagger pick
When Ajaya Sharma and Taneia Bhardwaj of ET asked Porinju the reason for his spectacular success, he humbly credited NAMO for it.
“I would say it was because of my multibagger pick and that mulibagger pick was Narendra Modi. In 2013 before the elections, I identified him as one of the best multibaggers for India irrespective of any politics or anything,” Porinju said with a gentle smile on his lips.
He explained that the three years of NAMO’s government have been a “wonderful development for India” and that it has created a base for Indian economy to grow at much faster rate for faster economic development.
Huge money still to be made
“In the next two years or next seven years stock pickers will be making huge money,” Porinju said, his eyes sparkling in anticipation at the huge gains that are waiting in the sidelines, waiting to be pocketed.
“I think there is long way to and I am extremely bullish on equity investing in India,” he added.
Don’t obsess over petty issues, always see the big picture
Porinju reiterated his pet theme that novice investors make a big mistake by focusing on the ultra short-term and getting upset over issues which are irrelevant in the larger context.
“You should have the big picture with you about India if you are investing in Indian equities, Indian businesses. We had many opportunities when people were selling off shares. The big picture should be always with the investors in the background so you will tend to do fewer mistakes,” he advised.
He added that there are “never-before structural changes happening in the Indian economy” and that only those who really understand it will make money.
Investors who get perturbed over petty and frivolous issues are doomed to remain in a poverty stricken state, he warned in a grim tone.
Valuations are cheap in the context of the future potential
Porinju offered the soothing assurance that the stock market is still in a “comfortable zone” and “cheap” in the context of the rapid growth of the economy, the increase in earnings potential of the companies etc.
“That is why I was telling the markets are at the bottom even though the Index is at the peak”, he explained.
How to build a portfolio of stocks
Porinju offered valuable advice on how to construct a portfolio.
He opined that in a portfolio of, say, ten stocks, one or two stocks should be blue chips which are well managed and with good quality promoters.
These stocks have good margin of safety and provide a good foundation for the portfolio.
The remaining stocks should be companies where structural change is happening due to recent economic developments, he said.
Porinju explained that while the non blue-chip stocks are risky and can easily lose 50% of their valuation if things go haywire, they also offer the chance to make mega multibagger gains if things go right.
So, if the stocks are chosen carefully and after proper due diligence, the rewards of such stocks outweigh their risks, he emphasized.
Multibagger stock recommendations
Obviously, no interaction with Porinju is complete unless we extract from him some multibagger stock recommendations.
Nitish Thomas and Niraj Shah of Bloomberg skillfully got him to talk about specific stocks.
Sarda Plywood can become a Rs 1,000-2,000-crore company and give 10-bagger gain
“Sarda Plywood Industries Ltd is one of the oldest and biggest names in plywood. DURO is the name of its brand. I bought it at a Rs 40-45 crore market cap recently. This can be a Rs 1,000-2,000-crore company if properly managed. If I manage this company, I will make it into a Rs 2,000-3,000 crore company in the next five years time”, Porinju exclaimed.
This is very significant revelation by Porinju because Sarda Plywood is still an ultra micro-cap with a market capitalisation of only Rs. 93 crore.
If it does become a Rs. 1,000 crore company in the next five years, we are talking of a magnificent 10 bagger (1000% gain).
Simplex Infrastructures Ltd & J Kumar Infraproject Ltd – beneficiaries of the infra boom
“I’m very bullish on infrastructure,” Porinju said and named Simplex Infrastructures Ltd & J Kumar Infraproject Ltd as potential beneficiaries.
“These kinds of companies will see huge orders from the government. Because the government is talking about lakhs of crores of investment and capital expenditure in each and every aspect of infrastructure, whether it’s roads or railway. So I think there will be a lack of bidders to execute these projects. And that is where you will have higher margins. I’m extremely bullish on infrastructure as a sector for the next 2-3 years,” he explained.
It is high time that novice investors like you and me take a cue from Porinju and start thinking about the long-term. We live from day-to-day and get frustrated over petty issues. Instead, if we could build a portfolio of top-quality stocks and hold it for five and ten years, it is certain that we will also be able to bask in great riches!