Madhusudan Kela of Reliance Capital is a well known Perma Bull. He is famous for his multibagger stock picks and has several multibaggers in his portfolio. Let us study his profile in detail
Education & Career
After securing a Masters Degree in Management in 1991 from the prestigious Mumbai University, Madhusudan Kela joined UBS. Thereafter, he worked for Peregrine Securities and Motilal Oswal Securities.
Madhusudan Kela’s big break came when he joined Reliance Mutual Fund as an equity fund manager.
During his tenure of nearly 10 years, Kela built a portfolio of multibagger stocks for Reliance Mutual Fund. The assets of the Reliance Mutual Fund grew from a mere Rs. 200 Crore in 2002 to more than 1 Lakh Crore in 2011.
Madhusudan Kela is presently the Chief Investment Strategist of Reliance Capital Ltd. He provides strategic input and guidance over an asset base of more than 1.75 lakh Crore.
(Rakesh Jhunjhunwala with Madhu Kela on the right time to buy stocks)
Madhu Kela’s Salary
The Reliance Mutual Fund has a reputation for paying very heavy salaries to its star fund managers and staff.
Sundeep Sikka, the CEO of Reliance Mutual Fund, took home a salary of Rs. 13.74 crore.
Sunil Singhania, the fund manager, received a salary of Rs. 8 crore.
The total salary paid by the Reliance Mutual Fund to all top executives was Rs. 41.50 crore.
Madhu Kela has the same stature as Sundeep Sikka and Sunil Singhania. If the two are receiving salaries in the range of Rs. 8 to Rs. 13 crore, it is reasonable to estimate Madhu Kela’s salary at about the same level of say Rs. 12 crore per annum.
Madhu Kela has been an equity investor for more than 20 years. His own investments have yielded heavy returns in addition to the heavy salary that he draws from Reliance Capital.
It is obvious that the net worth of such an illustrious individual has to be in three digits.
It is known that the net worth of Prashant Jain, the fund manager of HDFC Mutual Fund, is in excess of Rs. 100 crore.
However, Prashant Jain’s salary is much higher than that of Madhu Kela.
It is reasonable to estimate that the net worth of Madhu Kela may be in the area of Rs. 50 to Rs. 75 crore.
Multibagger stock picks
Madhusudan Kela has built a formidable reputation for himself for his ability to spot multibagger opportunities when they are small and available at dirt cheap valuations.
Some of his earlier stock picks when he was a fund manager with Motilal Oswal Mutual Fund and also Reliance Mutual Fund include stocks like REI Agro, SpiceJet, Adani Enterprises, Jindal Steel and Power, Radico Khaitan, Pantaloon, BEML, Kirloskar Brothers and Jaiprakash Associates etc.
Jindal Steel & Power is a good example of the stock picking ability of Madhu Kela. He bought Jindal Steel when its market capitalisation was a mere Rs. 300 crore. After that, the profits of the Company increased 40 times. The market capitalisation kept pace by increasing 200 times in seven years. There was also a P/E expansion because the multiple rose from 3x to 15x.
Latest portfolio of Madhusudan Kela
|Stock||Nos of shares||Percent||Value (Rs Cr)|
Radico Khaitan Ltd.
IRIS Business Services
International Conveyors is one stock in the portfolio in which Madhu Kela has a lot of confidence. He holds 17.10 lakh shares in his own name and 16.15 lakh shares in his name of Madhuri Kela, his wife.
Madhuri Kela is also a big investor in Panama Petrochem, a small-cap company engaged in manufacturing lubricant products.
Max Ventures is a stock that Madhu Kela is known to be bullish about. He got Reliance Small Cap Fund to buy a large quantity of the stock of Max Ventures.
Kela is also known to be very bullish about Indiabulls Ventures (Securities) (Indiabulls Integrated Services Ltd). He bought 35 lakh shares in April 2015 though the present holding is not known.
He has also revealed in a youtube interview that he holds shares in Divis Labs.
He also held shares in a small-cap Pharma company named SMS Pharmaceuticals Ltd.
Madhu Kela has also made his debut into the SME sector by buying a SME company named IRIS Business Services.
There may be several other stocks in the portfolios of Madhusudan and Maduri Kela which we will have to detect and find soon.
Stock recommendations of Madhu Kela
In the past, Kela used to offer stock recommendations and this was of great benefit to investors because several stocks have become multibaggers.
Kela has now recommended that investors buy mid-cap banks and NBFCs.
Latest interviews, podcasts
#CNBCTV18Exclusive | Madhu Kela says temporary tightness in the money mkt would not have a long-term impact & @Lakshmi1876, CIO Debt, @KotakMF says current panic offers good opportunity to MFs to buy bargains in the market@_prashantnair @SumairaAbidi pic.twitter.com/0HtG6pDxtw
— CNBC-TV18 News (@CNBCTV18News) September 21, 2018
The domestic equity had a heady fall on Friday, Sep 21, 2018, as shares of select frontline banks and housing finance companies suffered heavy losses.
Market Veteran Madhu Kela said “This looks like a technical selloff. A few NBFC companies have clarified that their short-term liquidity situation is very good and when I say short term, they said that for the next one year they have enough liquidity in the liquid accounts to match the liabilities. This looks like speculative unwinding and for a long-term investor, if you really understand the company and if you have faith in the management, these are brilliant opportunities to buy these companies.”
Madhu Kela advised investors to take advantage of the volatility in the midcap market as the stocks can be available between 40 and 60 percent.
Stock tips during interview with Sonia Shenoy
In an interview with Sonia Shenoy of CNBC TV18, Madhu Kela talked of specific stocks and gave stock tips.
He referred to Bharat Heavy Electricals Ltd (BHEL) as a blue-chip large-cap stock that investors can buy. He explained that BHEL’s earnings looked so bad as if life is coming to an end. However, the bad earnings were because of a Rs 1,200 crore one time provision which BHEL made.
Kela also recommended a buy of blue-chip PSU banks like Punjab National Bank (PNB), Bank of Baroda (BoB), State Bank of India (SBI) and IDBI Bank. He stated that these stocks are quoting at deep discount valuations and that the risk of a downside is very low while the upside potential is very high.
He explained that a lot of the earnings of blue chip PSU stocks are looking bad because of the cleanup of the system itself. However, investors are taking to another extreme that State Bank of India (SBI) will continuously provide Rs 20,000 crore per quarter, quarter after quarter for the next six quarters. People are fearful that next year SBI may provide another Rs 80,000 crore. People who are fearful need a reason for another fear.
This fear in the stock market creates the ideal opportunity to buy stocks because stocks are available at dirt cheap prices Madhusudan Kela said.