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we have a special voice joining us right

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here in the studios the ever popular Ace

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stock picker Porinju Veliyath is here with us

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uh on us in on our show today in the

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studio pju good evening thanks a lot for

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your

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time well you know I was just telling

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Tanya I remember the first time uh we

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met about 10 years back at that time

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your PMS was just starting off and was

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say sub uh 100 CR a double digit number

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and now we are meeting today when the

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market is a record high and your is

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1,000 CR in AUM how has the journey been

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and what kind of CHR youve returned in

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that

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period um you're right it was some 60 70

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CR when we met long back and you know it

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was markets were stagnant it was very

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difficult to uh collect funds or manage

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funds that time um I would say the last

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three years was the Game Changer in the

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whole thing and thanks to Narendra Modi

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uh that's what I feel um it's not only

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about you know we had the 90% growth we

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are operating last 14 years MH the 90%

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of the growth in the a happened in the

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last 3

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years um and I would say it was because

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of my multibagger pick and the

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multibagger pick was Narendra Modi in

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2013 before the elections I identified

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him as one of the best multi baggers for

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India mhm I know respective of any

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politics or anything I don't have any

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political lineage that night so I feel

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uh that was the base so when you have a

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base you have confidence the small small

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silly things happening in the world or

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in the you know our border like it won't

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affect you so those things will become

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very positive as an event you can pick

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stocks that time like we had last 3 4

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days and you see ultimately what

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happened the last 3 4 days you know we

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had 5 days of panic and today Market at

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the SX closed to the historic High yes

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correct so that is that is the structure

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of India even going forward mhm uh so

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I'm seeing next 2 years or next 7 years

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uh you know stock Pickers will be making

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huge money money now coming back to the

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am it's very exciting to me uh for

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Equity intelligence we are a very small

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firm with 13 14 people working and this

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was totally unexpected to be very Frank

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uh but the confidence uh we built um uh

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with that base uh and the our outlook on

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the economy and the markets going

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forward which is still on we have long

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way to go so I am extremely extremely

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excited even looking at the

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future, CR is mean feet and I remember

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the last time we chatted you know you

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were really emphasizing about how the

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domestic investors have really kept the

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faith uh is that what really worked you

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think also for know you know for your

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own PMS because the fact remains that

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you know in in in some time perhaps you

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will see you know heightened domestic

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participation demonetization for you

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know one perhaps is reason why we're

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seeing so many people now flock to the

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market yeah there are there are various

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aspect to this uh uh element one is of

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course demonetization and the related

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things demonetization cannot see it as a

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single incident now the GST is another

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part of it no government need to take

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credit for that but you know something

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it's going to be a sea change for the

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economy as we have been talking about

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you know from black to white from

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unorganized to organized you know this

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is a never before kind of a change

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structural change happening in the

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economy those who really understand it

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make money they get perturbed you know

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they won't be shocked to see some small

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rtion at the looc or something happening

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in China or some uh the president

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election in America these kind of these

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all are very very silly things if you

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have the big picture with you about

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India and you are investing in Indian

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equities Indian businesses so people

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should see that uh see and people don't

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learn from the history this is something

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amazing MH see how many opportunities we

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had in the past where there was some

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absolute and people all sell off shares

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uh so many many incidents including the

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RBI uh governor was when he was out yes

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people were selling off shares I think I

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don't know this is like very rational so

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that's what I'm telling the big picture

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should be always there with the

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investors in the background so you will

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tend to do less mistakes P you know uh

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in the last 3 years as you said was a

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game changer for your own fund as well

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as for the market uh someone who is you

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know watching this show right now one

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has to approach the market right now uh

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it also is fraught with risk because

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small and midcap has already got uh

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massively uh you know the runup is there

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behind them what should the approach be

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how do you think next 2 three years

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would be and how should one be

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approaching the market right

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now Indian market today is even going by

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the valuation it is a comfortable U zone

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for me okay and when you when you try to

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uh get an insights into the future how

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the econom is taking shape how these

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companies are going to grow

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and the earnings potential of these

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companies I feel it is cheap that is why

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in our last interaction I think with nun

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I was telling the markets are at the

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bottom this is what I feel when you look

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forward markets are at the peak when you

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see Last 5 Years for the next 5 years

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markets are at the bottom I don't really

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mean 100 200 points can move here and

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there that I don't know about that it's

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not important so uh so investors should

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stay invested uh I remember talking

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about 100 billion

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domestic um the household savings coming

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into equities I really mean that not

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exactly 100 billion I don't know how big

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it is maybe 5 six lakh crores this is

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not just di net flow I am talking about

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I'm talking about the way uh households

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will be acquiring shares instead of Bank

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deposits real estate and gold MH you

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know money Indian households are we are

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one of the best servers in the world MH

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so cannot underestimate that there is a

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huge potential so 100 billion is not a

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big amount that especially the middle

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class and lower middle class Indian

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households can pump into equities so

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that's a technical Factor but it's not

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only a technical Factor this money will

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you know it will create more Capital

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formation and that will help these

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companies to grow faster uh the

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deleveraging will happen there will be

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more profitability so it's a

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cycle so everything is looking very

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bullish uh in the given uh environment

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today okay so let let me ask ask you

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something you know your your reputation

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precedes you and pju often times U you

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know you're known as somebody who picked

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the right multi you know the midcap or

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the small cap company I want to ask you

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what your take is on large caps and I'm

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saying that because off late look at a

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Reliance Industries look at a ICICI Bank

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look at the kind of move you saw on L&T

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do you think that finally we're going to

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see some of these large caps also have a

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sort of breakout and do some of the

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heavy lifting for you know

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you know if you look at the analyze of

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his own portfolio stocks like biocon

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jubin Balaji big ones have actually

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moved quite a lot whereas the that you

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only buy lot of people misunderstand I a

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penny stock picker no I didn't say penny

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I said small I didn't say in fact our

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average uh Capital market capitalization

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of the our Holdings is 3,500 CR M so

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there are some large cap companies too

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okay and uh some of sometimes I used to

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buy personally uh some very small

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companies taking a risk of it yeah so

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luckily some 90% of that is going right

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and that I'm betting because I have been

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always talking on it now yeah see the

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turnarounds happening in this country

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this is a once in lifetime opportunity

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where the promoters are changing their

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attitude or they are forced to change no

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not not allowing themselves to siphon

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off money and creating black money and

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assets for their family they have to now

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create wealth only through the market

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capitalization so that will uh benefit

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the minority

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shareholders no but what I'm what I'm

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asking you is that is is there money to

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be made on some of these Blue Chips you

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know that we've seen I mean would you

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bet on them I I did recently not in PMS

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I was I was even suggesting uh at 900

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levels Reliance Industries okay that was

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the second largest that point of time so

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it's not that I'm I'm a to large gap to

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be very Frank T I don't think about the

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cap of the stocks I'm looking at Value

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okay so in in of value traditionally

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normally I have been ending up with

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midcaps okay or some large small caps

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that's where the best of money could be

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made and that is the history and even in

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the future I feel investors should not

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ignore companies because they are small

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because the small companies and some

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smaller midcap companies they will be in

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that category of what I used to talk you

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know even chore managements uh turning

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around they are forced to become good

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promoters good uh good manag man agement

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taking care of the minority shareholders

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paying dividends stopping siphoning of

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money so those kind of and people are

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already building I'm telling you I I'm

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I'm I was staying in C reges yesterday

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midnight a a promoter came to meet me

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it's a 5,000 company but it's a small

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cap stock okay because the market cap is

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very small because of various reasons

00:09:21.120 --> 00:09:26.600
lot of that 5,000 gr is commodity so I

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could feel from you know he want to

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change he was after me to for a meeting

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last few days

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so when he came to I'm coming in coin I

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mean to Mumbai he wanted to meet me so

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there is there is an urge from all this

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traditionally family managed companies

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the promoters they want to change they

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also want to go professional they also

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want to grow like a cotk or like a Maro

00:09:45.640 --> 00:09:48.680
you know they were all very small if you

00:09:47.040 --> 00:09:50.880
remember they want to capture the value

00:09:48.680 --> 00:09:52.880
actually on the books and Via market cap

00:09:50.880 --> 00:09:54.600
right P also you're coming at a time

00:09:52.880 --> 00:09:56.079
when Modi government is finishing 3

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years in office it's coinciding with

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Market at record high you've been

00:09:57.720 --> 00:10:02.200
talking about the leadership for 2013

00:10:00.079 --> 00:10:04.360
onwards what do you make of it for the

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work done so far as a market par because

00:10:04.360 --> 00:10:09.200
after all all the work of reforms does

00:10:06.480 --> 00:10:10.959
get impacted in the market as well and

00:10:09.200 --> 00:10:13.560
in that light there the remaining two

00:10:10.959 --> 00:10:15.880
years of this term yeah remaining 7

00:10:13.560 --> 00:10:18.880
years I don't believe it's 2 years this

00:10:15.880 --> 00:10:21.240
is my hope because I I I love India I

00:10:18.880 --> 00:10:23.360
want to see India progressing uh

00:10:21.240 --> 00:10:26.399
especially the economy I want to see the

00:10:23.360 --> 00:10:28.320
500 million the 50 CR poor people in

00:10:26.399 --> 00:10:31.040
this country they are life getting

00:10:28.320 --> 00:10:33.480
transformed becoming comfortable in life

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now so that's why I talked uh I hope

00:10:33.480 --> 00:10:37.959
that this kind of a uh management of the

00:10:36.079 --> 00:10:40.200
economy by politicians to continue for

00:10:37.959 --> 00:10:42.760
at least next 7 years we are going to

00:10:40.200 --> 00:10:44.680
places so this last 3 years it was an

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amazing period for Indian economy for

00:10:44.680 --> 00:10:50.120
investors now now the viewers I'm

00:10:46.800 --> 00:10:52.399
telling you a lot of them if they R

00:10:50.120 --> 00:10:54.560
introspect if there was no Narendra Modi

00:10:52.399 --> 00:10:56.360
or this kind of a government uh this

00:10:54.560 --> 00:10:59.399
kind of a economic policies in the

00:10:56.360 --> 00:11:00.800
country mhm many of them may be feeling

00:10:59.399 --> 00:11:02.079
know there they would have been their

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net worth could have been those who are

00:11:02.079 --> 00:11:05.600
active in the markets and investors I'm

00:11:03.680 --> 00:11:10.600
talking about their net worth could have

00:11:05.600 --> 00:11:12.720
been 25 or 30 40% down than today so

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that is the extent of wealth creation

00:11:12.720 --> 00:11:17.320
has happening in this country because of

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not just one man I'm talking about

00:11:17.320 --> 00:11:21.839
because of a system which has come a new

00:11:19.120 --> 00:11:24.160
system of uh economy management which is

00:11:21.839 --> 00:11:27.200
happening with long-term Vision you know

00:11:24.160 --> 00:11:29.839
it's not very strong and hard decisions

00:11:27.200 --> 00:11:32.320
being made where people are uing in the

00:11:29.839 --> 00:11:34.160
queue so this is called a hard decision

00:11:32.320 --> 00:11:36.440
not no political leaders will take a

00:11:34.160 --> 00:11:39.320
risk of that sure so this is something

00:11:36.440 --> 00:11:42.000
amazing so I I I'm still telling I am

00:11:39.320 --> 00:11:44.720
not any political party supporter though

00:11:42.000 --> 00:11:46.160
I don't like certain parties uh you know

00:11:44.720 --> 00:11:48.200
it's it's something it's something

00:11:46.160 --> 00:11:50.880
amazing happening in this country I'm

00:11:48.200 --> 00:11:53.120
telling you 99% of people are still

00:11:50.880 --> 00:11:54.760
underestimating this development this

00:11:53.120 --> 00:11:56.720
development for me is not a political

00:11:54.760 --> 00:11:58.839
development it's an economic

00:11:56.720 --> 00:12:01.320
development so what's on your radar

00:11:58.839 --> 00:12:03.040
these days in terms of value investing

00:12:01.320 --> 00:12:05.399
and you know there's there's so much

00:12:03.040 --> 00:12:07.680
talk about how this Market is just it's

00:12:05.399 --> 00:12:09.639
a Teflon Market if I can call it that

00:12:07.680 --> 00:12:12.880
nothing sticks right it just sort of

00:12:09.639 --> 00:12:15.279
continues to just uh go up where where

00:12:12.880 --> 00:12:16.959
are you looking for Value I mean you

00:12:15.279 --> 00:12:19.639
mentioned turnaround companies I know

00:12:16.959 --> 00:12:21.800
that you know recently U Shalimar pains

00:12:19.639 --> 00:12:23.519
was one company that you uh you know

00:12:21.800 --> 00:12:26.240
showed interest in I think there was

00:12:23.519 --> 00:12:28.279
there was another Sim yeah so I mean of

00:12:26.240 --> 00:12:30.839
course you know these are U some of the

00:12:28.279 --> 00:12:32.399
long-term ideas but you know which which

00:12:30.839 --> 00:12:34.079
sector which theme because I know you

00:12:32.399 --> 00:12:36.160
won't tell us specific these are some

00:12:34.079 --> 00:12:38.000
old companies some some you know special

00:12:36.160 --> 00:12:40.320
themes yes so that's why I once told

00:12:38.000 --> 00:12:42.399
there there are hundreds of themes I

00:12:40.320 --> 00:12:44.360
would say sub themes in this how do you

00:12:42.399 --> 00:12:46.199
go about looking for a theme I don't

00:12:44.360 --> 00:12:48.240
look it comes you know if you keep your

00:12:46.199 --> 00:12:50.760
eyes and ears open it comes to

00:12:48.240 --> 00:12:54.079
you we not all that

00:12:50.760 --> 00:12:56.160
gifted no and again you know when you do

00:12:54.079 --> 00:12:59.600
investor typically he want to make a

00:12:56.160 --> 00:13:01.440
portfolio of eight or 10 stocks so maybe

00:12:59.600 --> 00:13:04.040
you'll be tempted to have one or two

00:13:01.440 --> 00:13:06.199
blue chips well managed good quality

00:13:04.040 --> 00:13:08.880
promoters kind of companies it's very

00:13:06.199 --> 00:13:10.839
good for for the margin of safety the

00:13:08.880 --> 00:13:12.959
remaining seven or six or seven

00:13:10.839 --> 00:13:15.079
companies for the next 3 years we

00:13:12.959 --> 00:13:17.360
already had 2 three years next 2 3 years

00:13:15.079 --> 00:13:19.720
I'm telling you investors should focus

00:13:17.360 --> 00:13:22.440
on the companies where that structural

00:13:19.720 --> 00:13:24.120
change happening due to the recent

00:13:22.440 --> 00:13:25.839
economic developments they the recent

00:13:24.120 --> 00:13:28.199
economic developments including the

00:13:25.839 --> 00:13:30.440
demonetization the GST is coming up and

00:13:28.199 --> 00:13:33.120
taking shape this is all very very

00:13:30.440 --> 00:13:34.920
drastic changes happening where where

00:13:33.120 --> 00:13:38.199
the black money dealing is going to be

00:13:34.920 --> 00:13:39.399
tougher right see T till now people were

00:13:38.199 --> 00:13:42.360
average in

00:13:39.399 --> 00:13:45.279
India buy a property worth 1 CR rupees

00:13:42.360 --> 00:13:46.760
you pay 20 lakhs check 80 lakhs cash

00:13:45.279 --> 00:13:48.399
this used to be it may not be everywhere

00:13:46.760 --> 00:13:51.560
like that I'm telling average this is

00:13:48.399 --> 00:13:53.440
has been happening in this country today

00:13:51.560 --> 00:13:56.160
if T is buying an apartment in Mumbai

00:13:53.440 --> 00:14:00.480
paying 50 50%

00:13:56.160 --> 00:14:03.560
cash some proposal come will be you

00:14:00.480 --> 00:14:05.399
anybody will be you know think twice

00:14:03.560 --> 00:14:07.959
right be thinking twice it's not

00:14:05.399 --> 00:14:09.720
comfortable see how the kind of newses

00:14:07.959 --> 00:14:13.160
happening in the in the country the

00:14:09.720 --> 00:14:14.560
income tax raate CBI enforcement I think

00:14:13.160 --> 00:14:16.800
this is a very positive Economic

00:14:14.560 --> 00:14:18.920
Development again mhm people will be

00:14:16.800 --> 00:14:20.800
less corrupt going forward they will be

00:14:18.920 --> 00:14:22.959
forced to change to become better human

00:14:20.800 --> 00:14:26.199
beings sure so this will this will help

00:14:22.959 --> 00:14:28.279
the economy the the organized economy

00:14:26.199 --> 00:14:31.040
and the formal economy so this will have

00:14:28.279 --> 00:14:33.880
a big huge impa in the listed company

00:14:31.040 --> 00:14:35.399
spaces that is what our domain is about

00:14:33.880 --> 00:14:37.600
so the listed companies are basically

00:14:35.399 --> 00:14:40.040
they are doing organized business some

00:14:37.600 --> 00:14:41.560
of them could be siphoning out have been

00:14:40.040 --> 00:14:44.040
siphoning off money kind of thing which

00:14:41.560 --> 00:14:46.639
is going to change now so this uh

00:14:44.040 --> 00:14:48.839
investor should focus on those companies

00:14:46.639 --> 00:14:51.680
and one or two stocks can go

00:14:48.839 --> 00:14:54.519
wrong it is happening to everybody yeah

00:14:51.680 --> 00:14:56.480
and some people may lose 50% even even

00:14:54.519 --> 00:14:58.240
if they go wrong in 50% in number of

00:14:56.480 --> 00:15:00.440
stocks the remaining the remaining will

00:14:58.240 --> 00:15:03.519
make huge wealth yeah so that can give

00:15:00.440 --> 00:15:05.079
25 30% C the five stocks alone will give

00:15:03.519 --> 00:15:08.920
for the total for the total amount

00:15:05.079 --> 00:15:10.759
invested 25 30% C for next at least 5

00:15:08.920 --> 00:15:12.680
years time I'm very confident about that

00:15:10.759 --> 00:15:14.560
that's the kind of opportunity Indian

00:15:12.680 --> 00:15:16.759
investors potential investor sitting on

00:15:14.560 --> 00:15:19.160
today and there is this is not going to

00:15:16.759 --> 00:15:20.759
end okay some people believe know maybe

00:15:19.160 --> 00:15:23.880
Market may rise another th000 points in

00:15:20.759 --> 00:15:26.320
Nifty and it will collapse no Market's

00:15:23.880 --> 00:15:28.160
going to sustain I'm not and again you

00:15:26.320 --> 00:15:29.759
know looking and focusing on Nifty also

00:15:28.160 --> 00:15:32.000
is not going to create much wealth if

00:15:29.759 --> 00:15:33.959
you see the last 2 3 years the big money

00:15:32.000 --> 00:15:35.920
was actually made in yeah so see now we

00:15:33.959 --> 00:15:38.240
had an A lot of people are making big

00:15:35.920 --> 00:15:40.839
money and India has I was discussing

00:15:38.240 --> 00:15:42.800
with a we have very large number of

00:15:40.839 --> 00:15:46.040
smart stock Pickers value investors in

00:15:42.800 --> 00:15:48.399
this country very few of them are known

00:15:46.040 --> 00:15:50.800
some we get some names from you actually

00:15:48.399 --> 00:15:52.680
get on the Chanel as well no no I was I

00:15:50.800 --> 00:15:55.959
used I got an opportunity to be on the

00:15:52.680 --> 00:15:58.360
national media and uh so that is maybe

00:15:55.959 --> 00:15:59.880
I'm known but I know a lot of stock

00:15:58.360 --> 00:16:03.279
because better than

00:15:59.880 --> 00:16:05.880
me and and and it's not few number very

00:16:03.279 --> 00:16:08.440
large so the when there's an opportunity

00:16:05.880 --> 00:16:10.880
on the macro level in the economy and in

00:16:08.440 --> 00:16:13.120
stock picking and fund management is

00:16:10.880 --> 00:16:15.360
going to be a major major industry it's

00:16:13.120 --> 00:16:16.880
not about this 5 lakh R 10 lakh R I'm

00:16:15.360 --> 00:16:19.920
I'm talking they will they will go 5 10

00:16:16.880 --> 00:16:22.959
fold from here so the the new formats

00:16:19.920 --> 00:16:25.519
will happen aif is something I am very

00:16:22.959 --> 00:16:26.519
happy to say today we got uh letter of

00:16:25.519 --> 00:16:30.720
approval

00:16:26.519 --> 00:16:32.160
for certificate for AF Category 3 so

00:16:30.720 --> 00:16:33.399
there there we have a lot of Advantage

00:16:32.160 --> 00:16:35.519
you know we can have a pool account

00:16:33.399 --> 00:16:38.680
system we need to keep only one account

00:16:35.519 --> 00:16:40.680
with the custodian PMS format has some

00:16:38.680 --> 00:16:43.680
uh you know you have to keep the Assets

00:16:40.680 --> 00:16:47.240
in each client's individual's account

00:16:43.680 --> 00:16:48.560
and mutual fund again I'm the Sip which

00:16:47.240 --> 00:16:51.560
I have been talking about last two years

00:16:48.560 --> 00:16:53.279
ago if if you remember sip is going to

00:16:51.560 --> 00:16:56.800
again a huge game

00:16:53.279 --> 00:16:59.560
changer so this five the100 billion it

00:16:56.800 --> 00:17:02.199
will have very uh different kind of

00:16:59.560 --> 00:17:03.720
pockets for that formats for that and

00:17:02.199 --> 00:17:06.120
this will happen I have talked 100

00:17:03.720 --> 00:17:07.799
billion in the next 18 months time and

00:17:06.120 --> 00:17:09.319
I'm very confident about that so the

00:17:07.799 --> 00:17:14.640
whole industry fund management industry

00:17:09.319 --> 00:17:14.640
is going to go through a huge uptrend