The rags to riches journey of Porinju Veliyath

The success story of Porinju Veliyath can be a real source of inspiration for many aspiring stock traders of India. From being a homeless person to becoming one of the finest stock pickers of the country, Veliyath has walked a long way. He is associated with stocks for almost 26 years now. In June 2002, he started Equity Intelligence India Limited. The company which has a strong clientele from various income classes from India and abroad manages the portfolios of some of the leading businessmen, successful professionals and even ordinary people. Now the question arises how he did all these and what struggles he had to overcome in his journey.

Today, we are sharing the story of Porinju Veliyath.

   

Taking up a job at the age of 16!

Porinju Veliyath was born into a lower-middle-class family in Cochin. His teenage days were full of struggles. The first and perhaps the biggest challenge came his way when he was only 16. His family during that time was going through a series of troubles related to finance. Such was the condition that at one point of time he was told that the family could no longer fund his higher education. The home in which they were staying had to be sold off to repay the debts. At that young age, Veliyath decided to take up a job to support his family financially. He relocated to Ernakulam, a city in the Indian state of Kerala which was witnessing rapid economic growth.

Young Veliyath started his job hunt in the new city. After a couple of days, he managed to get a job as an accountant in a private firm. His salary was Rs. 1,000 which was quite less. To meet the expenses of the entire family and fund his own education with his meagre salary was a real tough task. He continued the job but was also looking for opportunities that would pay him higher. In his second job, Veliyath worked as a telephone operator at Ernakulam Telephone Exchange. His salary was Rs. 2,500.

Porinju Veliyath’s decision to study law

Meanwhile, Porinju Veliyath successfully completed his higher secondary education. He wanted to study further, but the high accommodation and fooding charges of most of the colleges became his barriers. He enrolled for the law programme of Ernakulam Law College which offered cheap accommodation and fooding charges to its students. Veliyath also continued his job at the Ernakulam Telephone Exchange. After 5 years, Veliyath graduated. Now he was armed with a decent education that could fetch him a better job. However, to his utter disappointment, he failed to bag a good job with a higher payscale in the next few months.

As a Floor Trader at Kotak Securities

Porinju Veliyath decided to move to Mumbai. Immediately after reaching the city he got a job as a floor trader at Kotak Securities. It was February 1990. From being a novice in this field, he quickly became an expert stock trader. He also started investing in stocks and learnt how the securities market functions. In his next 4 years of stay with Kotak Securities, Veliyath gained immense knowledge on the stock market.

In July 1994, he left Kotak and joined Parag Parikh Securities as a Research Analyst and Fund Manager. He worked there till 1999.

Taking up 8% stake in Geojit Securities

Veliyath learnt many things during his 9-year stay in Mumbai. He gained enough experience and decided to trade in stocks independently. For him, the Mantra was – Anyone with common sense can make money from the stock market. Veliyath moved back to Kochi and made his first major investment by taking up 8% stake in Geojit Financial Services. The company was valued at Rs. 2.5 crores at that time and was trading in single digits. Many investors were surprised with his decision. For them, it was a bad pick. However, investment in Geojit earned Veliyath good fortunes later on. With the money, he even bought back the land and the house which his family had to sell off to repay the debts.

Justifying his decision, Veliyath once said, “The decision to buy Geojit was fairly a simple one. Here you have a dividend paying company having capital market exposure, clean management and no debt – all for grabs at just about Rs. 3 crore. It was an easy decision.”

Porinju Veliyath’s another stock pick that turned multibagger was Shreyas Shipping & Logistics Ltd. He picked it up in 2012. The stock was trading at Rs. 30 at that time. On August 7, 2015, the stock price touched a high of Rs. 765. He booked profits at around Rs. 700.

In 2002, Porinju Veliyath started his firm Equity Intelligence through which he manages client funds of more than Rs. 400 crore.

Porinju Veliyath’s story is inspiring. He is a perfect example who built a fortune for himself out of nothing!

Porinju Veliyath Investment Style

Identify and Invest in future multi baggers

Porinju has always identified and invest in future multi-bagger companies. The first example was Geojit Finance. The second example is Shreyas Shipping & Logistics. He invested in this stock in the year 2012. At that time stock was trading at Rs.30.The stock has reached an all-time high on 7th Aug 2015 Rs.839.

Make strategy when to Exit from stock

Porinju exited from Shreyas Shipping by booking profit at the level of Rs.700. After reaching all-time high stock price is now reduced to Rs.271. So, it is important to know when to exit from stock.

Buy lesser-known, high quality businesses to derive maximum portfolio value.

Entire portfolio holding of porinju is full of less –known, high-quality business. E.g No one was aware of stock such as Gokaldas Exports or Nirvikara Paper Mills before he invested.

Invest in companies with clean balance sheet, honest management and clear business visibility

Porinju always invests in companies with a clean balance sheet, honest management, and good business potential. He invested in Geojit Financial Services for these qualities only.

MORE WILL UPDATE SOON!!