Renuka Ramnath Of Multiples Beams With Joy As Porinju Veliyath & Ashish Chugh Send Micro-Cap Realty Stock Rocketing 250% In Just 4 Months

When Renuka Ramnath caused Multiples Equity to buy a massive truckload of shares of Arvind Limited, she had not even taken its piddling real estate division into consideration. So, when Arvind announced a demerger of the real estate division into Arvind Infrastructure and consequent allotment of shares in the demerged company, Renuka Ramnath and the other big-ticket investors in Arvind were mildly annoyed. They did not want to deal with a piddling holding (Arvind Infra’s total market cap was less than Rs. 80 crore) and get involved in a sector (realty) that they were not interested in. So, a number of big-ticket investors like MV SCIF Mauritius, Sundaram BNP Paribas, Norges Bank etc wasted no time in dumping the Arvind Infra stock immediately on allotment.

This is where we have to appreciate the brilliant strategic thinking of Porinju Veliyath and Ashish Chugh. The two stalwarts not only keep their eyes and ears open to what is happening around them, but they also have a razor-sharp mind that is able to pierce through the clutter and home in on great hidden opportunities.

Ashish Chugh made it gently known that he is bullish on Arvind Infra by a series of tweets:

A potential investment opportunity may arise when a demerged company from large corporate house gets listed & has FII/ Institutinal Hldg 1/2

— Ashish Chugh (@hiddengemsindia) September 13, 2015

Institutions may be exiting stock not because of potential of demerged co, but becuse Inv may be below their tick size – giving rise to opp.

— Ashish Chugh (@hiddengemsindia) September 13, 2015

Ashish Chugh made it as plain as he could. He gave an example of Marico Kaya, which became a blockbuster on demerger, and linked it to Arvind Infra, sending the clear implication that Arvind Infra could be the next Marico Kaya.

Examples Marico Kaya-350cr Vs Marico-25000cr Arvind Infra-80r Vs Arvind-6500 cr Point is Mcap is so low, becomes insignfcnt to hold for Inst

— Ashish Chugh (@hiddengemsindia) September 14, 2015

Interestingly, two days before Ashish Chugh’s tweet, Porinju had already pocketed a big chunk of 160,000 shares of Arvind Infra at Rs. 35.59 apiece by laying out an investment of Rs. 56.94 lakh.

Having bought the stock, Porinju threw his weight behind Ashish Chugh’s analysis by also pinpointing Arvind Infra as a classic opportunity that arises on listing of a demerged entity and institutional selling.

Arvind Infra, the newly listed (demerged from Arvind Mills) could be one such opportunity? http://t.co/puM9mlZ0ys https://t.co/wmJJlD0gMW

— Porinju Veliyath (@porinju) September 13, 2015

After that, Porinju showed more conviction in Arvind Infra. Though the stock nearly doubled, he bought two lots of 1,30,000 shares each, at Rs. 68.63 and 62.99 respectively, by laying out an aggregate investment of Rs. 1.71 crore in the name of Equity Intelligence, his PMS.

So, Porinju’s total investment in Arvind Infra is 160,000 shares in his personal name and 2,60,000 shares in the name of Equity Intelligence. It is not known if Porinju has bought more stock other than through a bulk deal.

Today, just four months after the fateful tweets of the duo, Arvind Infra stands tall at Rs. 125. This means that Porinju is sitting on mind-boggling gains of 250% since his first purchase on 11th September at Rs. 35.59. His investment of Rs. 2.28 crore is worth Rs. 5.25 crore.

Not surprisingly, Porinju is thrilled at the way things have turned out:

Stock Ideas can from anywhere! This demerged stock (idea) is up over 250% in 4 months! https://t.co/Q3qrLylizg

— Porinju Veliyath (@porinju) January 12, 2016

Fortuitously, Renuka Ramnath’s Multiples Equity is the biggest beneficiary of the wizardry of Porinju and Chugh. As of 30.09.2015, Multiples Equity held 10,80,000 shares of Arvind Infra, which had been received on demerger. It has effortlessly made MTM gains of 9.72 crore on the investment.

The moral of the story is that the next time Porinju and Chugh tweet something together, we need to pay close attention and act on the advice!