- Porinju Veliyath of Equity Intelligence wrote a letter to his investors on Thursday explaining the poor performance of the portfolio.
- There has been no respite from the sell-off in mid and small-cap stocks in India for over 18 months, he said.
- Some of the budget provisions did not acknowledge the cardinal principals of a free-market economy, according to Veliyath.
- Veliyath had earlier written a similar letter to his investors in January 2019 when the portfolio had lost nearly half its value in the preceding nine months.
A star equity investor in India with over ₹1,000 crore worth of assets under management has been forced to write yet another letter to his investors explaining the poor performance of his portfolio.
Porinju Veliyath of Equity Intelligence's latest letter rued the seemingly endless sell-off in mid and small-cap stocks in India for over 18 months. Making matters worse for Veliyath, who has over a million followers on Twitter, are the provisions of the latest budget presented by the newly appointed Finance Minister
Nirmala Sitharaman.
"Some of the budget provisions did not acknowledge the cardinal principals of a free-market economy," Veliyath said in his letter on Thursday (July 18) adding that the the positives of the continuity in government has been lost with the market unfriendly provisions in Budget, at least for the near term.
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Though the blue-chip stocks have held up largely, nearly 90% of all listed stocks in India have lost anywhere between a third to as much as 90% of their value in recent months, Veliyath wrote in despair.
Some of the stocks that Veliyath is known to have invested in have lost as much as 85% in the last six months, since his last letter to the investors.
| Stock | Last 6 months |
| LEEL | -85.42% |
| Duroply | -38.85% |
| Ansal Buildwell | -50.71% |
| Eastern Treads | -35.32% |
| Raunaq EPC Intl | -61.66% |
| Kerala Ayurveda | -19.23% |
| Palash Sec | -6.98% |
| Shalimar Paints | 3.47% |
$4Veliyath, in his last letter in January, said that the portfolio had lost 44% of the investors' money in the preceding nine months mostly because of one stock, LEEL Electricals Ltd (formerly Lloyd Electric & Engineering).
In a private letter on January 11, accessed by news agency IANS, Veliyath's firm Equity Intelligence apologised for the 'flawed investment' that eroded millions in value, adding that there may be no benefit in selling it now.
Seven months later he continues to hold some of his loss-making bets. "Many of you would be wondering why we are holding on few underperformers in the portfolio. After a significant draw-down, to sell any under-performing company and shift to alternate opportunities, we need to take a call on many aspects," Veliyath wrote on July 18.
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