They are some of the biggest investors in the stock market, with an uncanny ability to pick the right scripts. Their preferences are cues for not just ordinary investors but also prominent fund houses.
Ashish Kacholia
When Ashish bhaiya (as children call him) visited the Samaritan Mission School at Tikiapara near Howrah in West Bengal 13 years ago, it was a 350 sq ft room with three windows and some 25 students — mostly children of rickshaw-pullers, housemaids and drug addicts.
"Bhaiya's eyes welled up when he saw our kids sitting on the damp cemented floor," recalls Mamoon Akhtar of Samaritan Help Mission, which runs the school. While departing, Ashish bhaiya handed the first of his numerous cheques favouring the Samaritan Mission.
Today, the school imparts digitised education to over 3,000 students, boasts a playground and a vocational training lab, all thanks to the generosity of Ashish bhaiya and his rich friends from Mumbai. Little do these kids know that their bhaiya is one of the most influential investors on Dalal Street.
Every morning before the market opens, a raft of WhatsApp stock tips/messages that float around lists trades done by Kacholia the previous day. Stock market blogs typically mention Kacholia's portfolio every quarter. Dealers and stock-pitchers sell investment ideas to potential investors saying, "Kacholia ne entry maara hai." His fan following is such that stock market enthusiasts have started comparing Kacholia to the likes of Rakesh Jhunjhunwala and RK Damani, the high-profile investors of Dalal Street.
Kacholia started his career with Prime Securities and later moved to the Edelweiss' equity research desk. After learning the ropes, he started his own broking outfit — Lucky Securities. He accepted mandates from investors, and in a short time, was making money for them. But then if you know how to make money, why would you do it for someone else? From 2003, Kacholia started focusing on building his own portfolio.
As is his won't, Kacholia did not invest in tried and tested large-cap stocks. He pushed himself to find new investment ideas in the mid- and smallcap space. This strategy paid off as companies such as Pokarna Granites, Vadilal, Camlin, Axiscades Engineering, Acrysil, Lokesh Machines, Zen Technologies, Shaily Engineering Plastics and Ashiana Housing turned multi-baggers (record gainers in stock market parlance) in his portfolio. Kacholia holds investments of nearly Rs 350 crore in companies where he has more than 1 per cent shareholding. "Ashish does a lot of research before investing. He's a risk-taker; he buys shares in chunks if he's convinced. He meets the management if his investment is large," says a broker who executes trades for him.
Kacholia believes in testing the strength of his portfolio. So if the overall market momentum is weak, he dumps a portion of his holding to check for price resistance patterns. If the stock manages to ride out even during an "engineered selloff", he increases his holding. Kacholia does not hold more than 25-30 stocks in his portfolio at any given time. His price target is usually 1.5-2 times the buying price. That said, if company fundamentals turn negative mid-way to target, he dumps the stock dispassionately.
Kacholia leads a simple lifestyle. He also stays away from the spotlight. "I am a private person. Bull markets create heroes and bear markets create zeroes. So, I'd rather stay anonymous," was Kacholia's response to ET's request for a meeting.
Winning stocks: Pokarna Granites, Vadilal, Axiscades Engineering, Acrysil, and Shaily Engineering Plastics.
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Mukul Agrawal
Mukul Agrawal is the newest kid to break into the rich club on Dalal Street.
"Mukul smells and breathes money," says a long-time acquaintance. "He's not scared to take large bets, but he does that only after consulting several other investors and fund managers. He has got a good ring of friends in the market," he says.
Agrawal's bets are often in the range of Rs 20 crore to Rs 50 crore. He is known to keep two portfolios — one for investments and other for trading. Stocks like Nesco, Unitech and Wockhardt have yielded good returns for Agrawal over the years. Bharat Bijlee, Zen Technologies, Rico Auto Industries, KDDL Ltd, Shalimar Paints and Sunshield Chemicals are said to be his other top picks.
Hailing from the Mumbai suburbs, Agrawal and his brother Mayank started investing in stocks in the late-90s.
As many investors did those days, Mukul Agrawal started trading aggressively on market information and stock tips. When he started making money on his trades, he increased his bets. Eventually, he started following the investment pattern of some of the savviest and most notorious stock traders of those times.
It is not known if Agrawal had a direct hotline to some of these traders, but their aggressive investment style impressed him, at least, a little, according to brokers who have known him for several years.
This is evident from his trades in a leading pharmaceutical company where he entered and exited (the counter) multiple times.
"Multiple entries and exits are a pure trading strategy and Mukul has perfected it very well. He makes a lot of money like this," says the research head of a broking firm. Apart from gathering market consensus, Agrawal is known to be a stickler for research, especially when he is buying in his core portfolio. "Mukul is aggressive, but he does not put his principal at risk. He meets the management of companies where has long-term investments," said the equity sales head of mid-sized brokerage.
Apart from equities, Mukul Agrawal is also known to have investment interests in real estate. He is said to have funded several real estate properties in suburban Mumbai, it is learnt.
Agrawal's success in stock markets comes partly from his close circle of friends. He talks to a wide array of investors - right from highly-placed fund managers to long-only investors and market-movers.
"He's lion-hearted for sure," says a top broker, adding, "He'll take you along if you are his friend."
When stock markets tire him, Agrawal and his friends go on fun trips abroad — to the snow-clad peaks of Switzerland or Fisherman's Wharf in San Francisco. If the chips are down on the bourses, the gang embarks on trips to temples or Gurudwaras. On Makar Sankranti day, they fly kites atop terraces.
Winning stocks: Bharat Bijlee, Hindustan Dorr-Oliver, Honda Siel Power.
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Rakesh Kathotia
Rakesh Kathotia bought his first shares 30 years ago while pursuing graduation from a college in Kolkata. Little did he know that the 100 shares of Andrew Yule Company he bought — on a tip from a friend — would hook him to the stock market for life.
Having lived through six rip-roaring bull runs, five depressing bear phases and two big scams, Kathotia has evolved into a wiser and more careful investor. "But I still take a lot of risks. Stock market is the only place where you can take the risk; you have to take the risk to make money on the bourses," he says. "I listen to a lot of people who have a logical approach to investing. If they make sense, I do my own research on the stock; and if I am convinced, I buy the stock in good numbers," Kathotia explains.
Kathotia's moment in the sun came in 2007-08, in the thick of India's biggest bull-run, when he made significant sums of money across trades. Market intermediaries who have long worked with Kathotia describe him as a momentum player. "He rides momentum stocks... he takes a big position, waits for the stock to appreciate and then dumps without any care," says a retired fund manager who has known Kathotia for over two decades.
Kathotia learnt the tricks of the trade while working with a chartered accountant in Kolkata. He relocated to Mumbai in 1987 and a few years later, started a company that lent working capital to corporates. All this while, he dabbled in stocks making small investments and booking profits regularly. The failed venture forced Kathotia to go back to the stock market. His next big break came during the tech-boom, when he made a lot of profitable investments. "Despite having a good run then, we lost money in some IT counters," Kathotia recollects.
In the lull that followed the tech-bubble burst, Kathotia started a private equity fund, Subhkam Ventures, which cut PIPE (private investment in public equity) deals and provided growth funds to startups. The PE fund has exited investments in over 15 companies till date. Kathotia returned to active stock trading at the onset of the last bull-run. "We actively participated in the 2006-08 bull-run. Frankly, many of our trade leads were information based, but we studied those stocks well before investing."
Kathotia looks at operating cash flows and free cash flows prior to investing in a company. Most Indian companies do not have free cash flows; in such cases, Kathotia focuses on companies with significant RoEs. He also invests in well-managed companies with low operating cash flows, provided they have robust business prospects. Zee TV, Unitech and DLF are among stocks that have turned in good yields for this investor. "I like finding new companies to invest. I track mid- and small-cap stocks very closely," he says.
This hobby of investing in lesser-known stocks has cost him dearly a few times, especially in falling markets. "Some of my picks during the tech boom touched zero in value. Until that time, I never believed the stock price could ever touch zero," he guffaws.
Winning stocks: Century Plyboards, Escorts, Sical Logistics, Essel Propack, Strides Arcolab, Eros International.
Credit: - Shailesh Menon, ET Bureau.
