Performance of PMS Funds in April 2019
First of all, we have to discharge our onerous responsibility of checking the performance of various assorted PMS Funds in the month ended April 2019.
The performance is a mixed bag, with a few out-performers and many laggards.
A PMS Fund managed by an unknown entity named “Landmark Capital Advisors” took pole position with a staggering return of 15.34 per cent for the month.
According to my investigation, Landmark Capital is a joint venture between Karvy and Landmark.
It is managed by three fund managers named Ashish Joshi, Bhavya Bagrecha and Bhushan Sawant.
We will have to keep Landmark Capital in our radar to see whether they have any multibagger stock picks up their sleeve that they are willing to share with us.
Another unknown PMS Fund named “Indiareit Fund Advisors” reported a stunning 11.92 per cent gain.
The third spot is taken by LIC Mutual Fund’s PMS with a return of 8.52 per cent.
Unfortunately, Porinju Veliyath’s Equity Intelligence PMS Fund had a harrowing time with a loss of 5.99% for the month.
Kenneth Andrade’s Old Bridge Capital and Varinder Bansal’s Pantomath Fund Managers also disappointed with losses of 3.96% and 6.42% respectively.
Thankfully, Basant Maheshwari and Saurabh Mukherjea managed to keep their heads above water with a flat return.
The fate of Sunil Singhania’s Abakkus Capital is not known because it is mysteriously missing from the list.
Money managers of the wealthy sweat it out; 90% PMS failed to deliver even 1% return in April #ETMarkets #MarketsNews #BizNews #MarketsUpdate https://t.co/MT0h0pMbh1
— ETMarkets (@ETMarkets) May 13, 2019
KAYA’s disappointing performance adds to woes
One reason why Porinju Veliyath’s PMS Fund is bleeding is because his high-conviction stock picks are not firing on all cylinders.
KAYA is one of the prime culprits.
It may be recalled that Porinju had advised a few months ago that KAYA is at “inflection point” and that it has the wherewithal to become a “Billion dollar company” in the foreseeable future.
#PorinjuTopPick | Pick 1: Kaya is our largest holding in the portfolio; at an inflection point. Kaya can become a billion dollar co over 5-6 years. @porinju #Budget2019 #BudgetSession pic.twitter.com/tGuv8K5HDA
— ET NOW (@ETNOWlive) February 1, 2019
#PorinjuTopPick | The smallcap czar @porinju shares one of his TOP MID-CAP PICKS#Budget2019 #Budget @AyeshaFaridi1 @nikunjdalmia #BudgetSession pic.twitter.com/qiK1wQN7hp
— ET NOW (@ETNOWlive) February 1, 2019
Unfortunately, that potential is not visible so far in the operating results and the stock is sinking like a stone.
Porinju’s PMS is the single largest shareholder of KAYA which means that he is taking the losses on the chin.
Equity Intelligence holding in Kaya has now crossed the 15% mark. @porinju now holds almost a staggering 2 million shares. Bet big, bet hard on high conviction stocks. pic.twitter.com/QkciGQ2V50
— Kush Katakia (@kushkatakia) June 8, 2018
Yes, @kushkatakia – I am betting on a valuable brand and futuristic business model from one of India's most respected entrepreneurs @hcmariwala – wealth-creator, shareholder-friendly & inspiring leader! https://t.co/eMrl7SDijI
— Porinju Veliyath (@porinju) April 18, 2018
Billionaire Harsh Mariwala will rescue KAYA?
However, all may not be lost for the beleaguered shareholders of KAYA because Harsh Mariwala, KAYA’s illustrious and self-made visionary Billionaire founder, has clearly indicated that the Company will soon get its act in order.
The mega Billionaire is adopting a hands-on approach towards reviving the fortunes of KAYA.
He is also sending clear hints to his massive and influential bank of followers that they should try and support KAYA’s products.
It is obvious that if Harsh Mariwala’s friends and followers support KAYA, its fortunes may soon be revived.
Visited the Kaya Youth oxy-zone for my daily dose of Oxygen at the #Marico organization communication event. Experience #SkinPranayam like never before. #innovation #skincare pic.twitter.com/ZUFvrU9ICp
— Harsh Mariwala (@hcmariwala) May 9, 2019
Getting out of the office, engaging with shoppers, actually seeing the products on shelves, & their display units is market research like none other! No number of calls/emails can replicate this. #HarshVisits #FMCG #Marico pic.twitter.com/cCxL7vRWki
— Harsh Mariwala (@hcmariwala) May 3, 2019
LEEL, Culprit No. 2, now hauled up by SEBI
LEEL was a tragic mistake for Porinju because he reposed utmost faith on its promoters and aggressively bought the stock like there was no tomorrow.
Leel Electricals in focus@porinju Equity Intelligence India stake in Leel Electricals has been increasing
Feb 2018 7.35%
Dec 2017 5.52%
Sep 2017 4.92%@CNBCTV18Live— Nigel D'Souza (@Nigel__DSouza) February 2, 2018
Keep an eye on LEEL Electricals@porinju Equity intelligence now holds 5.4% in the co https://t.co/q2kaPym9Pc
— Nigel D'Souza (@Nigel__DSouza) September 29, 2017
BSE disclosure says @porinju 's EQ takes his stake to 2.1 million shares (5.36%) in LEEL electricals. Woah!! pic.twitter.com/OTAZLww2UD
— Kush Katakia (@kushkatakia) September 29, 2017
Unfortunately, the promoters stabbed him and the other shareholders in the back by allegedly siphoning off the funds received from Havells for their personal businesses rather than using them for the benefit of the Company and its shareholders.
Naturally, Porinju seethed with rage at the alleged betrayal by the promoters.
“On 30th May 2018, to the shock of entire minority shareholders, including us, the company arbitrarily wrote back the profit from sale of CD division in FY18 annual results to Rs. 663 cr, triggering a selloff in the stock.
Company also diverted nearly Rs. 340 crore to promoter entities including the listed debt laden entity Fedders Electric Ltd as capex and loans for buying land and factories of their own plants.
The stock fell from Rs. 215 to Rs. 127 in 5 days and the liquidity in the counter dried up,” he stated in his newsletter to his PMS clients, trying to keep his fury under control.
He vowed to bring them to book and make them pay.
“Losing hope on the management after months long attempt, we decided to take up the issue with the authorities and engaged a leading Corporate law firm in Mumbai to explore various legal remedies available and subsequently filed a complaint with SEBI – seeking of forensic audit of books of accounts LEEL Electricals, without which the suspected fraudulent actions of the promoters and senior management to siphon off company’s wealth for personal enrichment cannot be proven legally,” he stated.
He also accused LEEL’s promoters of committing “daylight robbery”.
“What has happened in Leel is day-light robbery. The company got nearly Rs 1,550 crore in 2017 through a deal with Havells. Yet, it has been reduced to a market-cap of Rs 40 crore. Investors will loose trust in the markets. One has to look where has the money flowed,” he fumed.
Legal system in India allows promoters to siphon-out money, cheat minority shareholders and defraud banks – all within the framework, just need to choose the right loopholes!
— Porinju Veliyath (@porinju) January 30, 2019
Don't believe that in the long term everything will be fine!
Even if Porinju likes the stock2004 – Stock was Rs. 40
2017 – Rs. 340 (Porinju buys!)
2019 – Rs. 40Porinju on why he bought this stock
Bought more and owned 8% of the co
and What went wrong!https://t.co/UMgyl37wFQ— Nagpal Manoj (@NagpalManoj) January 12, 2019
SEBI to the rescue – LEEL’s promoters may be prosecuted for criminal fraud
The mandarins at SEBI know that Porinju’s complaint cannot be taken lightly because he wields enormous influence on Dalal Street.
He has a follower base of 1.1 Million (11 lakh) which is next only to that of Warren Buffett’s 1.52 Million.
Porinju is also known to be close to NAMO and/or the top brass in the ruling party (BJP).
Thank you for your kind words. https://t.co/eywX79a4ZX
— Narendra Modi (@narendramodi) March 6, 2017
@porinju Woah!!! I am sure the PM doesnt thank every now and then.. Your tweets must have stuck a chord
— Niraj Shah (@_nirajshah) March 7, 2017
@porinju yes Sir, it's great to be greeted by the PM. And see @LittyPorinju Ma'am is your senior here ? https://t.co/xOeej6n4Ea
— Singaraju (@Singaraju_R) March 8, 2017
@porinju @narendramodi National Heros exchanging greetings???✌✌✌
— Kishore Khubchandani (@Bkrrishh) March 6, 2017
@porinju Graceful gesture by the man of masses @narendramodi to another man of India's investing masses @porinju ???
— Sudhir Trikha (@sudhtrik) March 6, 2017
@porinju he is best for nation, u r best for investors…When we have such gems, we need not worry about Khalids, media n left
— Veerendra (@veerendra1971) March 6, 2017
According to a report in HBL, SEBI has acted with commendable alacrity and threatened to launch adjudication and criminal proceedings against the alleged unscrupulous promoters of LEEL and its officials.
Deloitte, a leading firm of Chartered Accountants, is conducting a forensic audit of the company and trying to unearth alleged shady deals.
It is stated that SEBI has found that a huge sum could have been diverted overseas and that large amounts were also used to pay off ‘so-called promoter debts.’
A colossal sum of at least Rs. 900 crore has been siphoned off from LEEL, HBL reported.
SEBI investigations are said to be at an advanced stage and an order may soon be passed by a wholetime member against Leel and its promoters.
Hopefully, better sense will prevail upon the promoters of LEEL and they will return the moneys allegedly siphoned off, rather than get into a hostile confrontation with SEBI and Porinju.
Will Porinju lose his appetite for “chor” stocks after LEEL?
There is a difference of opinion amongst punters at Dalal Street as to whether Porinju is still gung ho about “chor” stocks.
Some point out that he has made such a massive fortune out of “chor” stocks that he is unlikely to lose his fancy for them only because of one bad experience.
In fact, Porinju has himself repeatedly claimed that his fortune and success in Dalal Street is attributable to stocks like Balaji Telefilms, Orient Paper, Orient Cement, KRBL, Mirza Intl etc, etc which were condemned as “chor” by the intelligentsia and the pundits despite their robust business models.
Don’t trust the 'experts' advising you, ’never buy penny stocks & bad companies’ – many of them are Industry leaders: pic.twitter.com/9UqMOjZz3R
— Porinju Veliyath (@porinju) August 5, 2015
When I accumulated 5% of Kitex @ Rs.5 to 8 and a significant stake in Cera @ ~75 (bonus) under PMS, many clients objected due to bad mngt!
— Porinju Veliyath (@porinju) January 5, 2015
Last year, when I bought Fin Cable @ 30, KRBL @ 20, Orient Cem @ 30, Granules @ 110, HSIL @ 80, SRF @ 150, they were bad guys!!
— Porinju Veliyath (@porinju) January 5, 2015
Recently when I was buying Shreyas Shipping @20, Force @425, Zicom @ 105, 8K Miles @110, many of you warned me about management quality!
— Porinju Veliyath (@porinju) January 5, 2015
When I accumulated 8% stake in Geojit personally at a mktcap of Rs.3 Cr, most of my well-wishers were uncomfortable!
— Porinju Veliyath (@porinju) January 5, 2015
High-Quality BlueChip Investing has its merits & higher safety, and trust me, you don't need a fund manager or advisor/distributor for doing it – provided you have passed SSC.
— Porinju Veliyath (@porinju) June 29, 2018
However, another school of thought is that the losses from LEEL are so severe that they may have affected Porinju’s sub-conscious sentiments and he may steer clear of chor stocks and make a beeline for blue-chips.
Obviously, nobody can answer this question better than Porinju himself.
We will have to await his next stock pick to see where he stands on the issue!
What happens if chor promotors of LEEL are sent behind bars and their assets are frozen , sold and siphoned money is recovered? Will that siphoned money come back to LEEL ? or it is just a deterrent to other chor promotors not do do chori?
Instead of studying the company and its share value better we study the promoters, their background, heritage and attitudes, i know an investor who is very very keen about the promoters
Kaya is not going to recover anytime soon! I have seen lot of stores where nobody visits its section or buys Kaya products. The problem lies with the quality of product and haven’t heard many who use its product. Its a great concept but with inferior products.It needs a major reahul.
pl do not follow porinju, every stock he has recommended is in deep discount ranging from 60 to 80%. Recollect the stocks recommended by him.HSIL, ANANTRAJ, ASHAPURA, EMKAY GLOBAL. TATA POWER ,LEEL, KAYA,WABAG.TATA COFFEE,GVK POWER,LIBERTY SHOE,ALLCARGO ETC .NONE OF HIS STOCKS ARE PROFIT MAKING.
Exact observation…….due to his foul recommend of GVK I losy my opportunity of selling it @26/-
He amassed great wealth for himself through force motors and kitex garments. I, me,myself
The question is not about existence of “chor” companies. It happens every where in the world – the number of “chor” companies could be different in different countries.
The important thing is that how Porinju has made his assessment about these companies and on what basis he invested his investors’ huge money into these chor companies, and mind it, it is not one or two companies, it is quite a large list of such chor companies. It only shows that he is irrational, over exuberant, a novice and a person who could be “impressed” upon very easily. These are definitely not the qualities of an experienced and expert fund manager who manages others’ money.
Whether SEBI is able to extract the money from LEEL promoters is another story and let’s not led by what SEBI does versus what Porinju did to the investment.
Before pointing fingers at other chor promoters why doesn’t he sell his property to cover the input cost of his pms investors? present political leaders derailed a healthy economy and so did he loot investors hard earned money by investing in low quality….what an irony..tell me who your friends are and I will tell who you are !!!
Investors should get back their hard earned cash from him, he sits with 500crs profit and his investors with 60% loss? what an appealing DESH BHAKTH…WHO IS HE FOOLING?…and NAMO sends BIRTHDAY WISHES TO LITTY, wah wah…this proves he is indeed patriotic
SEBI took lot of time to investigate and still it is not complete. We all know how difficult it is trace the fraud money. One loophole or other, so much time goes by and people lose track of it. We all know what is happening to KF Mallya, Nirav and Kochar cases. Don’t see different scenario here.
Even if the money is not in the books of LEEL, look at it its performance and it is so dismal that there is nothing to talk about. It sold its highly profitable venture and it has left with nothing to continue.
Consumption has come down and all FMCGs are struggling to post growth. It is extremely hard to drive growth for Kaya at least in immediate future. Further slide in Kaya might bust Porinju’s PMS.