The Baseline    
30 Jul 2021
What did superstar investors buy in Q1FY22?

By Parth Mansinghka

The portfolios of marquee investors tell retail investors what they are bullish on in the market. The superstars with large portfolios recently bought stakes in some interesting companies. Some of their biggest buys can be seen in the chart below. 

Superstar buys

Rakesh Jhunjhunwala buys into financial services space

Ace investor Rakesh Jhunjhunwala bought a 2.17% stake in Indiabulls Housing Finance, a 0.42% stake in Edelweiss Financial Services, and a 0.38% stake in Federal Bank in Q1FY22. Federal Bank recently announced its Q1FY22 results and recorded its highest-ever operating profit of Rs 1,135 crore, and Jhunjhunwala seems bullish on this Kerala headquartered bank.

The ‘Big Bull’ also bought a 1.39% stake in the steelmaker Steel Authority of India (SAIL) during Q1FY22. The company cut its net debt by Rs 16,200 crore in FY21 and the expectation is that SAIL will further reduce it by another Rs 6,800 crore by FY23E. Also, the sales volumes increased by 5% in FY21.

Dolly Khanna buys stakes in yarn and fertilizer companies

Dolly Khanna bought stakes in many companies in Q1FY22, including three yarn spinning companies - Deepak Spinners (2.07% stake), Nitin Spinners (1.24% stake), and RSWM (1.05% stake). This can be because the economy is opening up and demand for textile and hence yarn is expected to rise in the market. The stocks of Deepak Spinners, Nitin Spinners, and RSWM rose by 84.7%, 67.7%, and 49%, respectively, so far in July 2021. 

Khanna also bought stakes in two fertilizer companies - Rama Phosphates (1.77% stake) and Aries Agro (1.49% stake). This comes ahead of the Kharif sowing season when the demand for fertilizers from the agriculture industry is expected to rise. The stocks of Rama Phosphates and Aries Agro are up 59.3% and 29%, respectively, so far in July 2021.

Sunil Singhania’s Abakkus Fund diversifies its portfolio

Sunil Singhania’s Abakkus Fund bought a 2.98% stake in DCM Shriram Industries in Q1FY22. The company operates in sectors like sugar, alcohol, organic and inorganic chemicals, drug intermediates, shipping containers, processed cotton yarn, etc. The company is likely to benefit as the economy slowly opens up, and as a result, the demand for its products grows. 

Singhania added two technology stocks to the Abakkus portfolio as he bought a 0.6% stake in Xchanging Solutions and a 0.08% stake in Technocraft Industries in Q1FY22. The stock of Xchanging Solutions and Technocraft Industries rose 43.8% and 23%, respectively, so far in July 2021. He also bought a 0.5% stake in Rupa & Company, a knitwear brand, and a 0.24% stake in Siyaram Silk Mills, a blended fabric and garment manufacturer. The demand for textile-related products is expected to grow in the upcoming months as people head out from their homes.

Ashish Kacholia buys stakes in welding, pharma, and technology stocks 

Ashish Kacholia bought a 1.13% stake in Ador Welding in Q1FY22, a welding consumables and equipment manufacturing company. The company aims to reduce legacy costs and improve profitability in FY22-23. Its stock has made a new 52-week high of Rs 880.2 per share this month. 

The superstar bought a 0.37% stake in IOL Chemicals and Pharmaceuticals and a 0.25% stake in Beta Drugs in the quarter. IOL Chemicals and Pharma is a bulk drug, intermediates, and specialty chemical manufacturer Beta Drugs makes a wide variety of anti-cancer drugs in India. 

Kacholia also bought a 0.55% stake in Garware Hi-Tech Film, the largest exporter of polyester films in India, which he also added via a bulk deal purchase on July 29. The demand for polyester films is expected to grow worldwide as the manufacturing of automobiles and construction of buildings start at full pace once economies globally recover.

Vijay Kedia adds large stakes in Elecon Engineering and Mahindra Holidays

Vijay Kedia bought a 1.19% stake in Elecon Engineering Company in Q1FY22. This comes when the demand for industrial gear systems and mining equipment is expected to increase as the industries and mining operations run at full pace all over the world. He also bought a 1.02% stake in Mahindra Holidays & Resorts India at a time when people are craving to go on vacations as soon as possible. 

Kedia also bought a 0.65% stake in Lykis, probably betting that demand for personal and home care products will go up. He also added a software and services company to his portfolio as he bought a 0.19% stake in Ramco Systems

Porinju V Veliyath buys stake in IRIS Business Services

Porinju V Veliyath bought a 1.33% stake in IRIS Business Services in Q1FY22, a software services company that provides training, testing, research, data conversion, e-filing, and consulting services to their customers. The stock of IRIS Business Services rose nearly 48.3% so far in July 2021 and made a new 52-week high as well.

Veliyath also bought a 0.15% stake each in Ashok Alco-Chem and Shalimar Paints during the quarter. The demand for Ashok Alco-Chem’s products like industrial alcohol, acetic acid, and Ethyl Acetate is expected to go up as demand from pharma, paints, resin, among others, is expected to rise once the pandemic subsides.

Many superstars bought stakes in companies from textile and chemical industries where the demand is likely to pick up in the upcoming quarters, as the economy opens up post the Covid-19 pandemic. The marquee investors investing their money in these sectors could be a positive sign for retail investors.

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