Up to 100x returns! Meet this Mumbai-based fund manager who turned Rs 1 crore to Rs 13 crore

Siddhartha Bhaiya, a Mumbai-based money manager, is making a killing on Dalal Street as over 60 per cent of stocks he has spotted so far have surged up to 100 times in the past 10 years. The solid return is also visible in his portfolio scheme Aequitas Investment India Opportunities Product which has an enviable track record of delivering nearly 30 per cent CAGR return to investors since February 2013. The figure indicates that an investment of Rs 1 crore in the fund by high net worth investors has turned into around Rs 13 crore during the same period.

Bhaiya, a chartered accountant, has been working in the industry for over 20 years now and is known for understanding market cycles and identifying high-quality companies through his contrarian approach.

In an exclusive interaction with Business Today, the portfolio manager said Avanti Feeds has delivered him over 100 times return during the period. It was followed by Finolex Cables and HEG (over 20 times), Maithan Alloys and Nilkamal (over 15 times), HIL, Garware Technical Fibres and CCL Products (over 10 times). “Some 17 other stocks including Astral Poly, Rallis India, IPCA Laboratories, Bajaj Finance and Gujarat Ambuja Exports have also created significant wealth for us,” he said.

Investing Strategy

While sharing his views on the investment thesis, the founder of Aequitas Investment said that they are value investors. “We believe in buying the sector leaders having good management and with an adequate margin of safety. Just like Warren Buffett, we love to hold our companies for their value creation abilities--holding good businesses for a long time automatically adds a lot of value to your portfolio,” Bhaiya explained.

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The industry watcher further highlighted that they do not subscribe to IPOs, QIPs or invest in companies which have a public history of less than seven years.

“We bet on management as much as we bet on companies. Over time, we have not diluted our investment philosophy and continue to do the same thing over and over again. We continue to focus only on our multibagger strategy and do not intend to dilute it by adding any other strategy,” said Bhaiya.

Views on the current market

Considering the present market scenario, the market watcher believes that small and midcaps are the sweet spot where one can tap into high-growth stories available at reasonable valuations. “But, one must look out for quality companies and industry leaders with a proven track record over the years. We couldn’t emphasise more on the importance of the margin of safety in this space. We suggest a well-diversified portfolio with balanced allocations towards index funds, good small and midcap stocks,” he said.

Sharing his advice with investors, he added that the market is on the cusp of a large capex cycle. Therefore, he thinks that manufacturing, commodities and infrastructure companies will return very strongly.

“The sectors such as metals, commodities, B2B manufacturing, capex-oriented companies, automobiles and pharmaceuticals will dominate the market,” Bhaiya said.

Mistakes to avoid

He further said that avoiding a few mistakes can also help investors to create decent wealth in the long term. Bhaiya added that the only way to beat market timing is to invest regularly. On the other hand, investors should also avoid taking tips from others.

“Lots of investors keep on seeking tips or seek the next trend in the markets - Investors have to remember – whosoever is giving them the tip is possibly the person who wants to offload that stock,” he said, adding one should also avoid leverage and timing the market.

“If you are seeking multibaggers you will have to give time to the company,” Bhaiya added.

Books to read

For starters, the market player suggested reading “One Up on the Wall Street” by Peter Lynch. “There are so many learnings in that book for investors that every time I read it – even after having read it more than 15 times I am able to get something out of it. I will also recommend another book ’Wall Streeters’ by Edward Morris,” he said.

He also loves reading the history of markets. For him, it is a window to learn from others' experiences. “Whether it is Warren Buffett's annual letters, The Robber Barons by Matthew Josephson, Manias, Panics, and Crashes by Charles P. Kindleberger, Fred Schwed's Where are the customer's yachts, 100 Baggers by Christopher W. Mayer and The Go-Go Years by John Brooks, I have read them all. More importantly, I learnt what not to do from them,” Bhaiya said.

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