Renuka Ramnath of Multiples Equity has proved her credentials as an ace investor. She invests in stocks that have strong fundamentals and are growing at a steady pace. Her portfolio now comprises of winner stocks like Cholamandalam, PVR and Arvind.
Renuka Ramnath got Multiples to buy a truckload of shares of South Indian Bank in September 2012 at the throwaway price of Rs. 22.
On 4th July 2014, Renuka Ramnath sold off a chunk of the shareholding to Mohnish Pabrai at Rs. 32.50. Yesterday, 2nd January 2014, she sold off the balance shareholding to Sankaran Naren’s ICICI MF at Rs. 30.50.
In the bargain, Multiples has raked in gains of nearly 40% from the transaction.
At this stage, you must note that South Indian Bank is attracting the crème de la crème of value investors. There is also an unspoken competition between Billionaire M. A. Yusuffali and Mohnish Pabrai on who holds the largest number of shares in South Indian Bank. Mohnish stormed the counter in the September quarter and dethroned MA Yusuffali. Mohnish’s current holding stands at 6 crore shares while Yusuffali holds 4.99 crore shares. However, it is unlikely that MA Yusuffali will take this affront lying down. So, brace yourself for some buying action in South Indian Bank as the two titans try to outdo each other.
Sankaran Naren’s interest in South Indian Bank is also very significant. I remarked in an earlier article that Naren is a hard-core value investor and that he doesn’t touch a stock if he is not if he is not convinced about its fundamentals and valuations.
If you are shopping for a mid-cap/ semi-large private bank, you can also consider Federal Bank and Karur Vysya Bank. Both come highly recommended by Daljeet Kohli. If you are looking for a top quality NBFC, you can consider Cholamandalam Finance which, according to Edelweiss and HDFC Securities, is quoting at “cheap” valuations and has high potential for gains. Another option is Shriram City Union Finance (SCUF) which, according to Amar Ambani of IIFL, is a “fascinating & profitable franchise geared for growth”.