Porinju Veliyath, a Kochi-based investor, believes that the next 20 years will be the rising phase of India's economic landscape. In his letter to investors, the founder and CEO of the PMS firm Equity Intelligence said India should break with a higher per capita GDP and bring prosperity of immense proportion.
Nifty and Indian equities, in general, would have an even more stupendous rise on the back of potential much faster economic growth and corporate earnings, he said.
Veliyath said that Warren Buffet once said that nobody buys a farm because people don't think it's going to rain next year, to convince investors to think and stay invested for long. They think it is a good investment over the course of 10 to 20 years.
We hope that this one advice is taken home by a lot of Indians to generate generational wealth for their families over the next 10 to 20 years, especially when we see India rising. He said that we hope that our cumulative learnings and rising prosperity in India would help us generate more wealth for our investors.
Veliyath said Equity Intelligence has been through multiple bear-bull cycles since 2003, from a few crores to Rs 1,700 crore assets under management. This includes several elections and political turmoil, the global financial crisis of 2007 -- 08, the pandemic once in the century, several scams and frauds, amongst others.
The sentiment pendulum has been swinging between greed and fear over the last two decades. We have managed to avoid getting caught at the wrong end of the pendulum most of the time, but sometimes we may have faltered too. He said that all this has led to cumulative learnings that very few organisations in Indian capital markets can claim to have amassed.
The market veteran said that when Equity Intelligence was founded, China was the rising story of the global economy. The global bull market in China was driven by capital formation in 2003 -- 2008 In the last 20 years, India's nominal GDP had grown at 12.5 per cent CAGR, Nifty earnings had grown 13 per cent CAGR and Nifty had delivered 15.4 per cent CAGR. This proves the belief of a value investor that prices are slaves of earnings in the long run, even though daily quotes fluctuate constantly, and are illogically related to all kinds of temporary and trivial influences.
Equity Intelligence held over 1 per cent stake in companies such as Orient Bell, Ansal Buildwell, Hindware Home Innovation, Kaya and Priti International at the end of December 2022, according to the data. Veliyath also held over 1 per cent in companies such as Duroply Industries, Ashok Alco-Chem, Aurum Proptech, Kerala Ayurveda, Taneja Aerospace Aviation, Lakshmi Automatic Loom Works, Max India and Orient Bell.