The Smart Investor: Porinju Veliyath

Porinju Veliyath's is a classic rag to riches story. It is packed with dramatic highs and lows. Born in a family with humble means, it was a challenge for Porinju Veliyath to get through every day. But due to his utmost dedication and perseverance, he not only overcame all his adversities but became India's one of the most successful equity traders and investors. Today he has a flourishing portfolio and a huge following amongst the investor community. How did he get there? How was his journey? We will try to find out the answers to all these questions as we explore the multiple dimensions of Porinju Veliyath's body of work.

Early Life

Born in Cochin to a middle-class family, Veliyath had to start early due to family's humble financial condition. He started working at the age of 16 and straggled his way through various jobs while continuing his studies simultaneously. Such was the degree of his family's hardship that they had to sell their family home in order to pay the debts. After working for a megre salary for long, and after completing his formal education, Veliyath decided to move to Mumbai and landed a job as a floor trader at Kotak Securities. This is where Veliyath cut his teeth as a trader and learned everything about the equity market. This experience shaped him into the investment wizard that he has become today. After working for Kotak Securities for 4 years, Veliyath left that job to join Parag Parikh Securities as a research analyst and fund manager. He worked here for next five years. In 1999, Veliyath left Mumbai to work independently. He moved back to Kochi.

First Iconic Trade

Soon after moving back to Kochi, Veliyath made his first major trade. He picked up 8% stake in Geojit Securities. The reason this trade turned quite a heads around was that at that time Geojit Securities was not a big thing. The company was valued at mere 2.5 crores and the stock of the company was trading in single digit. Veliyath was widely criticised for his audacious decision. Some even called it a bad buy. There were many people who were suggesting that Veliyath might end up losing a lot of money in this trade.

Once the dust settled down over the Geojit trade, Veliyath had the last laugh. Just within few years, the stock price took a steep upturn and brought a load of fortune to Veliyath. Such was the magnitude of this trade that not only it made Veliyath a wealthy man but also enabled him to buy back his home which he was forced to sell during his period of hardship.

While explaining his decision Veliyath said that there were too many positives about Geojit which made his decision to invest in it very easy. He said that it is a company which is paying regular dividends, has a competent management and no debt. Due to such strong fundamentals, Geojit realised it true value in a due course.

Investment Philosophy

After Geojit, Veliyath made a number of other successful stock investments. One of his most recent successful investment was Shreyas Shipping & Logistics Ltd. He bought the stock in 2012 when it was trading at Rs. 30, in 2015, it reached around Rs. 700 bringing enormous profits to Veliyath. Many people talk about Veliyath's investment philosophy. However, his investment style is pretty abstract. He sometimes holds stocks for as a long-term investment and sometimes exits the stock at a short-term. Over the years, he has created his reputation as an expert stock picker, who has an eye for multibagger stocks.