When I last profiled Renuka Ramnath of Multiples Equity, I described her as being a “clear headed and focused thinker”. I also pointed out that Renuka Ramnath “evaluates all pros and cons of an investment in an objective manner and when she is convinced about the merits of an investment, she does not hesitate to back her conviction with serious money”.
Arvind is a prime example of this.
On 1st January 2014, Renuka Ramnath got Multiples Equity to pick up a chunk of 98 lakh shares of Arvind at Rs. 149 per share. She laid out a fortune of Rs. 146 crore for the acquisition (Multiples now holds 1.08 Cr shares).
At the time that Renuka bought Arvind, the stock was already on fire, having doubled since August 2013. However, such was Renuka’s confidence and conviction in the stock, that she was not deterred. She knew there was terrific value still in Arvind and she did not hesitate one little bit.
That conviction has paid off big-time for Renuka Ramnath because at today’s CMP of Rs. 255, there is a gain of 71%, amounting to an annualized gain of about 106%.
There appears to be a lot more gains left in the stock. Arvind recently announced that it had entered into an agreement with GAP Inc, the iconic retailer, to sell its’ products in India.
Arvind has also entered into a franchise agreement with “The Children’s Place”, a specialist in children’s garments.
Arvind has also ventured into E-Commerce with a brand called “Creyate”. Tech-savvy teeny-boppers will love this because they can custom-design their clothes on a 3D visualization engine.
Kulin Lalbhai, Arvind’s ED, also sounded bullish about the prospects of the company by stating that they aim to do Rs. 1000 crore business in the next 3 years.
At this stage, we also need to compliment Niket Shah & Atul Mehra of Motilal Oswal for their brilliant analysis that Arvind is turning into a “brand powerhouse” and that there would be huge gains for investors.
Of course, Renuka Ramnath remains our inspiration always because she talks with her money riding on the stock.