KOCHI: He’s the star fund manager on Dalal Street though he operates from Panampilly Nagar in Kochi. Investors throng around him, be it at a Mumbai star hotel, the Delhi airport or at an Ahmedabad mall- pestering him for stock tips, some to thank him for his past stock recommendations, and of course, taking a selfie with their stock market idol.
In Kochi, he’s barely recognised, which is not a bad thing after all, as it allows him to move around freely. Stock market is a difficult business to master, but he’s mastered the art of stock picking, and his performance over the last decade or so proves it beyond any doubt.
Meet Porinju Veliyath, founder and CEO of Equity Intelligence India, which began operations in 2002. The assets under management of Equity Intelligence have now crossed Rs 1,000 crore.
To understand Porinju’s stock picking skills, consider this: If you had put Rs 10 lakh in his fund in 2003, it would be worth Rs 5 crore today, a mind-blowing CAGR (compounded annual growth rate) of 32.7 per cent! The same money put in Sensex would have grown to Rs 94 lakh, and if you have put the same amount in fixed deposits, as most Malayalees do, it would be just Rs 30 lakh, after taxes now. Porinju’s twitter handle is suggested by professors in multiple IIMs to their students for proper learning in value investing. “I am really proud of it,” he says. Similarly, one of the leading publishing houses want to convert his tweets into a ‘Tweet Book’ and publish it. “I’ve asked them to wait,” he informs.
Porinju feels bad that people in Kerala are not hooked on to stock investments. When he says ‘stock investment’, he means value (long-term) investing and not the day trades or the short-term speculations. Only about five per cent of his 1,350 investors are from Kerala. Porinju who has a twitter following (about 75,000) gives a stock idea or a comment on the macro-economy, once in a while, which is lapped up by his followers. Again only about five per cent of his twitter followers are from his home state.
His influence to move a stock price is also well-known. Recently, Porinju posted a photo of him with Kishore Biyani of Future Group when the latter visited Nilgiris store at Panampilly Nagar. Since then, the market capitalisation of the Future group has doubled from Rs 16,000 crore to Rs 32,000 crore. He has been betting on Biyani’s Future Consumer from Rs 10.50 apiece. The stock is now trading at Rs 34-range. Future Consumer is the largest holding in Equity Intelligence PMS (Portfolio Management Service).
His bet on Wockhardt stock is legendary. He started to buy the shares of the pharma company founded by Dr Habil Khorakiwala when the company was going through its worst crisis which includes huge debt of Rs 3,800 crore. “Only two people believed in the company at that time: me and Khorakiwala,” he smiles. He bought Wockhardt stock at Rs 120-range. The rest is, as they say, history. The stock price zoomed to over Rs 2000, though Porinju booked profits at Rs 1200-range.
His bets on Kitex and Cera Sanitaryware are also equally eye-popping. He accumulated five per cent stake in Kitex at Rs 5-8 per share. In Kitex, he exited at Rs 15, but the stock price went up and up to cross Rs 1000 apiece. “No regrets. Full benefit is a myth in value investing,” he says. Cera Sanitaryware, he bought at around Rs 140-160 apiece, after observing from housewarming functions that the house-owners/property developers were using Cera products. He booked profits in Cera Sanitaryware at Rs 300 apiece.
So what are his future plans? For a start, he’s launching another fund ‘EQ India Fund’ (Category-III Alternative Investment Fund). The minimum ticket size for the new fund is Rs 1 crore. Porinju expects to collect at least Rs 500 crore for the fund, whose corpus can go up to Rs 1000 crore in a few months.
His latest bets are Kaya Ltd, where he bought 5 per cent of the company at an average price of Rs 850. Another stock where he’s betting is Federal Bank. “We bought Federal Bank at Rs 45-55 apiece last year for the PMS,” he says, adding that the firm has starting booking profit in the banking stock.
While every market pundit is cautious on the stock market, which is trading at an all-time high, Porinju has a different view altogether. “When you look at the market from last five years’ point of view, yes the market is at an all-time high. But, if you look at the stock markets five years into the future, then we are trading at an all-time low levels,” he says, predicting the Sensex to touch 50,000 levels in next 4-5 years.