Porinju Veliyath is making money hand over fist. His life story can be a case study for other fund managers on how a genial attitude, simple approach of sharing stock ideas and managing public relations can lead to seriously big money.
When I last reported on the situation in June 2015, the AUM of Porinju’s PMS, Equity Intelligence, stood at Rs. 220 crore. Porinju had himself revealed this fact in an interview to CNBC TV18.
Today, Equity Intelligence’s AUM stands at Rs. 330 crore. Porinju made this startling disclosure in his latest interview to NDTV (@16.35).
This means that in just about three months, Porinju has raked in an amount in excess of Rs. 100 crore from eager investors!
This is quite remarkable when you bear in mind the fact that the stock markets are in a moribund state and there is no froth or excitement amongst the average investors.
In fact, the mutual funds are struggling to attract investors. The PPFAS Mutual Fund, for instance, has seen its AUM increase from Rs. 593 crore in June 2015 to Rs. 598 crore in September 2015, a meager increase of only 0.83%. This is a far cry compared to the 50% increase seen by Porinju’s PMS in the same period.
Porinju also disclosed that the PMS has a concentrated portfolio of only 8 to 10 stocks. This is surprising because it was always assumed that because Porinju prefers to invest in so-called low-quality stocks, he would have a highly diversified portfolio so as to mitigate the risk.
One stock, NIIT Ltd, is 17% of the portfolio, Porinju revealed. He did not indicate what the other stocks are. My guess is that Selan Exploration, Jubilant Industries, Ansal Buildtech, Om Metals, Tata Global Beverages, TCI, HSIL, Godrej Properties etc may be the rest of the portfolio.
Porinju dropped a hint in the interview that the PMS is compounding gains at a phenomenal rate of 33%. He also confirmed this in a tweet:
Value Investing is all about 'Stock Picking'; India is a paradise for the game! pic.twitter.com/n5c0jfZIPj
— Porinju Veliyath (@porinju) October 3, 2015
You will be astonished to note that a CAGR of 33% means that your money grows 40 times in 13 years. A sum of Rs. 1 lakh, compounded annually at 33%, grows to Rs. 40.75 lakhs in 13 years. In 20 years, the said Rs. 1 lakh becomes Rs. 2.99 crore.
Porinju also indicated that the 33% return is after fees and expenses. According to an old prospectus of Equity Intelligence, the fee charged by the PMS is 1% of the average NAV plus a 20% share of the returns above 10% p.a. So, if 33% is the take-home return for the investors, it means that the fund has earned 38.75%.
This means that if the average AUM is Rs. 330 crore and the fund earns 38.75% annually (Rs. 127 crore), Porinju keeps a 1% flat fee of Rs. 3.30 crore and also keeps 20% of the excess above 10% of the gains (Rs. 22.86 crore). The investors keep Rs. 104.14 crore. Porinju’s take-home pay is Rs. 26.16 (Rs. 3.30 crore + Rs. 22.86 crore).
No wonder Porinju has a big and happy smile on his face at all times!
Now, what we have to discover is Porinju’s secret formula for attracting investors, picking winning stocks and making such enormous sums of money!
I have my doubt over his stock performance as these are not in public domain.Also quality of his stock selection is not inspiring if it is same as we think. In my view his followers may have bumpy ride . But he seems to be brave and bravery can result into any situation.But if performance is same as being reported,than Congratulation to him.His investers are the best Judge.
All eminent gurus-icluding Warren Buffett , Charls Munger and Phillip Fisher- have unanimously advised that one of the pre-conditions to be a successful investor is necessity of sticking to his circle of competence.Which style of investing is Porinju Valiath’s forte ? Is he Value Investor? Is his style Growth Investing? Or Contrarian Investing? Or Speculation?Or simply Punting?I fail to understand. He is credited with making move at the most opportune time.How does he do it ?Yet another mystry.
Can we learn any lesson by following Porinju Veliyath’s picks? I don’ know.
Apart from his claim, can anyone judge his claim n monitor d same time to time?..is there anyone here taking his PMS service?..also to investigate how he is timing superbly in his maximum stock pickings lije in demarger in Jubilant Inds., TCI etc???…is he getting some inside info???
If he says NIIT is 17% of his portfolio, and he has bought NIIT @ 48 Rs etc…shouldn’t his name come under here:
http://www.moneycontrol.com/bse/shareholding/shp_public_shares.php?sc_dispid=NII&qtrid=86.00
17 % of 330 cr means +++++ 56 cr
ie…56/1591 =0.03 % of NIIT Ltd …..holding/market cap
Thats why his name is not in shareholding
Sorry it is 3 % of holding but not mentioned in shareholding
Something is fishy
he is holding it under different client names of PMS. Thats y its not appearing.
What about gokaldas exports, not mentioned in his portfolio
He might have bought gokaldas in his acciubt nit in PMS…because its quality not good
.
Selan exploratiin is the only underperformer iN his PMS portfolio
He is star of the season but seasons change. So hero towards zero also possible
May be he is after un popular stocks or which doesn’t qualify to be in the “coverage area” of those so called analysts or fund managers, his clients are gaining, and does not hear any difference of opinion against his claims!!!! I am not supporting him nor dishonouring him, he is the superstar of the moment in Indian stock market as of now.
I am a member of his PMS , and without disclosing more, I can vouch for the figures mentioned – they are 100% correct. His stock picking acumen is certainly impeccable, whatever may the distractors say
Good advertisement.
Hello Kharb ,
Your comment “Good advertisement” is in Kharab taste !
Why should I advertise for him, Porinju does’nt need any advt ? some one in the forum asked specifically if any member is subscribing to Mr Porinju’s services, and in that tone, I gave a reply.
I as a small investor have burnt my fingers in numerous very reputed PMS schemes and advisory services
Mr Porinju, I found that he speaks his mind (on TV interviews) , albeit that may sound brash or curt to some
What he speaks he does it, investment and scrip choice wise , if you follow him on twitter you shall find that he his doing a great service to smaller investors who dont have the min PMS amount of Rs 25 L , he openly gives stocks names which he feel one should invest, and believe me, those shares are also in his PMS – absolutely no double speak on this count.
The compounding gain % mentioned in the article are correct , and that is what I mentioned in my 1st post , so question of me advertising for him is absolutely baseless , I am a just one of his PMS members , and not a planted one !
Thanks
Dear Hemant Kulkarni, I don’t mean what you understand.Actual user is always good advertisement for product.Pl change your taste for better ,my dear friend.I believe what you say,I would like to track his picks ,what you say are also in public domain. How I can come to know. ,just for evaluating purpose.Who knows after that my and your view are same.
Kharb Sir,
No offence meant at all !
Happy investing
hi hemant,
even i am of the benefiaciaries of equity intelligence, wanted to know which pms have your tried earlier and burnt fingers.
which are the other good pms in your experience, you can send me on djrish@gmail.com or here as you are comfortable
I am also a member of PMS.It has given me annual returns of over 23% of
for 8yrs .I started investment just before the global recession,when the senses was around 20000 level.Within in a year after the investment,I lost 80percentage of my money.Then porinju communicated me to invest more money into PMS.I didn’t trust him or I didn’t understand what he meant at that time.Now I regret because I would have made lot more with few lacs of investment.The key for making money is long term investment and wait for the right time to exit.If I loose some of my profit ,which is very likely in Indian share market,I will be prepared to pump in some money and wait for the right opportunity ..
Hi Jose, Can i contact you re: your experience.
Hi Jose,
can i have your contact details i wanted to learn from your experience on email or mobile as you are comfortable
Hi Jose,
can i have your contact details i wanted to learn from your experience on email or mobile as you are comfortable
Hello Hemant Kulkarni,
Are you happy with their Fees structure? I think it is a bit too high i.e. 20% above 10% of returns
In July 2005 Equity Intelligence, the PMS services that Porinju Veliyath runs had around 5 % stake in Granules India. In an interview to Business India published around that time he had spoken highly about the company. Granules India did not perform for many years and slowly eased the stock out of PMS . Ten years later Granules is cynosure of the investing participants. As of Sept 2015 disclosure Equity Intelligence does not hold any stake in Granules .or may not be top holding in the PMS . Even Granules India Annual Report for March 2015 does not indicate any holding by Equity Intelligence. He was the one who spotted the counter early. But failed to hold on to the counter for a longer period . Even International Finance Corporationthat held around 10 % some 6-7 years ago too has lightened its stake and I suspect may have existed the company before real action is to take place .Now it is a 100 bagger candidate as pro founded by one brokerage . Those running the PMS are required to maintain decorum. Should not be in the business of tweeting indiscriminately. There is Nilesh Shah who runs Envision Capital. But maintains the decorum. Earlier instances have shown that those stock market participants who propelled themselves into limelight were down the hill once the market reversed the direction.
dear , hemant kulkarni sir, i want to subscribe PMS services of porinju. may i contact you for some of my queries about your personal experience. my mobile no is 09415183121
if its 17% of porinjus portfolio, why is it not listed in shareholding pattern? in fact all his 9 or 10 stocks should be listed in shareholding pattern…
I think Force motors is also there in pms
When Porinju disclose all his stock picks very candidly,den any member of his PMS …plz disclose d stock list wid their weightage…this return is really superb…
I would like to avail services of PMS. I have no knowledge of stock market. Can anyone suggest a good PMS company. I am small investor with 25 lakhs to invest.
Dr. Tawade, you can reach me on 8803014272
Veliyath can now guarantee returns, just buy shares, Tweet and then retail investors will follow, exit at a good profit partly or fully, he has the name and visibility to do this now, lucky for him
Hi DJ Rish
Earlier I tried share khan , Prabhudas Lilladher , Kotak and scores of paid advisories on email n SMS – they all miserably failed
Thanks
Hemant
Right Hemant. The big names in industry are all poor performers when it comes to PMS. There is an old article on PMS analysis here, which clearly mentions the same.
Conflict of interest (big brokerage house will constantly churn your portfolio for their broking gains) is something which we need to care about. In all my search on Internet, I didn’t see anything bad for Porinju and quite inclined to avail his services.
http://amc.ppfas.com/media/news/pms-performance-the-good-the-av.php#.V0vVP3qtuoo
He has 3 ways of charging –
1) 1% of NAV (yearly) + 20% of profile above 10 % gain
2) 2% of NAV (yearly) + 10% of profile above 10 % gain
3) 3% of NAV (yearly), No profit sharing
While I’m inclined for #1, in a bull run the investor gain comes down. Do you know if Porinju maintains same stock composition irrespective of the charge fee?
Hi Prasad,
You said “…. Do you know if Porinju maintains same stock composition irrespective of the charge fee?”
I bet, you have added a new dimension, never thought of it !
But I feel and hope, irrespective of fee slab – his stock selection should not change
Thanks
hemant
mr prasad,
yes largely same atleast in six months of my experience and rightly so because if the investment horizon is for 3 years plus then why keep shuffling.
hemantji,
have you tried any PMS in specific which has worked well or not worked well ?
As I said before, big names failed, and equity Intelligence worked in my case , but a caveat here – this fantastic CAGR is for 8 year plus accounts , so one has to be patient
Thanks
hemant
He is managing money for more than 600 plus investors and for each persons portfolio he usually holds 7-8 stocks from a list of 18 to 20 stocks which he have shortlisted. The return for all the 600 plus members won’t be the same, unlike a mutual fund. So the high return he is claiming may have been received by some investors, who have started the PMS at “EI” at the same time, but not all.
There are few things he is claiming to be not totally true. He says he doesnot advertise his PMS, but i have found his bill boards in airports. He have also is a regular talking head at TV channels like ETnow, bloomberg india & TV 18. He has certain time, set aside for TV channels and that itself is a form of advertisement.
When you see him in TV he looks a likable guy. Once i had an opportunity to chat with him personally and i felt he was a bit arrogant. He kept on boasting and taunting about his acheivement. (This is my personal opinion how i felt and may be for others this might be normal)
He have a lot of fans. When he talks about a stock on TV i have seen the price going up quite a bit. There are lot of things you feel suspicious about, like insider information, talking a stock up and dumping etc. (though there are no proof he is doing it)
Having his family members account separately also makes him suspicious.
It is also worth noting that if you can get returns what he claiming in the long run it is exceptional, which i am a bit sceptical about going forward.