Madhusudan Kela Portfolio: Top 4 Stocks

Making money from stocks may look easy as pie in a bull market, but identifying successful investments can be a formidable challenge for most investors.

To overcome this obstacle, a popular approach that has gained worldwide traction is known as copycat investing or coattail investing or also referred to as side-car investing.

This method involves carefully monitoring the investment activity of renowned market experts and diligently mirroring their buying and selling actions. Smaller investors here ride the coattails of their idols in hopes of multiplying their investments.

With a successful track record and extensive experience in the financial sector, one such Indian investor whose investment decisions are closely watched and emulated by many in the Indian market is Madhusudan Kela.

Known for his ability to identify quality companies with strong growth prospects, Madhusudan Kela is one of the most well-known and seasoned investors in the Indian stock market, with an extensive experience of over 27 years.

He prefers a value investing style and has a long-term investment horizon. Today with four companies in his portfolio, his net worth is over Rs 6.8 billion (bn).

Please note the source of holdings listed below is from Ace Equity, and it may or may not be a complete list of holdings.

#1 Choice International

The first stock on this list is Choice International.

Madhusudan Kela holds a 12.1% stake in the finance company or 12 million (m) shares as of December 2022, according to the shareholding pattern of Choice International.

Considering the company's current market price of Rs 280 as of 31 March 2023, Madhusudan Kela's total value in Choice International comes to around Rs 3.4 billion (bn).

He initially added 12 m shares of the company to his portfolio in September 2022. Since then, his holding has remained constant.

His rationale for buying the counter,

• I believe in financials, infrastructure-related companies, pharma and China plus one manufacturing theme for India. My basket is from these four, and the next mega-trend will be from these sectors.

After his investment in the company, shares have been on an uptrend, gaining 30%.

The rally in the stock came after the company reported around a threefold jump in its net profit in the financial year 2022.

His constant stake in the company can be justified by his optimistic view of the financial sector. He believes that the financial sector will make more money in the next three years than the IT sector.

For the December 2022 quarter, Choice International reported a 43.1% YoY rise in revenue to Rs 963.4 million (m). Its net profit for the quarter came in at Rs 139.1 m, flat YoY, on account of an increase in expenses.

Going forward, the company aims to expand its presence in India to increase its client base.

#2 IKAB Securities and Investments

The second company on this list is IKAB Securities and Investments (now known as MK Venture Capital).

According to the latest shareholding pattern of IKAB Securities and Investments, Madhusudan Kela holds an 83.7% stake or 2.9 m shares of the total equity.

Considering the company's current market price of Rs 1,129 as of 31 March 2023, his total value in IKAB Securities and Investments stands at Rs 3.3 bn.

Since his initial investment in March 2022, his holding has remained constant.

After Madhusudan Kela acquired 84% of the share capital from promoters in March 2022, the shares have rallied over 60%, delivering multibagger returns.

IKAB Securities is engaged in the NBFC business and performs mutual fund distribution, IPO activities, life insurance, providing loans and other financial services.

The company can be classified as a firm which pivoted its business and thrived, as originally it was established as a textile company for manufacturing yarn.

For the December 2022 quarter, it reported a 206% YoY rise in revenue to Rs 140 m. Its net profit for the quarter came in at Rs 92 m, up from Rs 4 bn in the December 2021 quarter on account of an increase in commission income.

Going forward, the company is planning to ramp up its revenue by increasing the investment quality of the firm.

#3 IRIS Business Services

Third, on the list is IRIS Business Services.

According to the December 2022 quarter shareholding pattern of IRIS Business Services, Madhusudan Kela holds a 5.6% stake in the company or 1 m shares.

Considering the company's current market price of Rs 70.5 as of 31 March 2023, Madhusudan Kela's total value in IRIS Business Services is Rs 760 m.

Here's how his holding has varied since March 2019.

Quarter Ending	No of Shares	stake (%)
Mar-19	1,072,000	5.68
Jun-19	1,072,000	5.68
Sep-19	1,072,000	5.68
Dec-19	1,072,000	5.68
Mar-20	1,072,000	5.68
Jun-20	1,072,000	5.68
Sep-20	1,072,000	5.68
Dec-20	1,072,000	5.68
Mar-21	1,072,000	5.58
Jun-21	1,072,000	5.58
Sep-21	1,072,000	5.58
Dec-21	1,072,000	5.58
Mar-22	1,072,000	5.58
Jun-22	1,072,000	5.58
Sep-22	1,072,000	5.55
Dec-22	1,072,000	5.55

Since his stake in the company, the share of the company has delivered a 25% return.

His stake in the company can be justified by the IRIS business' long-term vision to bring digital transformation in India.

The company, earlier in March 2023, launched in invoice registration portal, one of the first private invoice registration portals authorized by the government to authenticate B2B and export invoices along with credit and debit notes for goods and services tax (GST).

For the December 2022 quarter, it reported a 13.5% YoY rise in revenue to Rs 166.3 m. Its net profit for the quarter came in at Rs 14.7 m, up 80.8% YoY, due to reduction in employee retaining costs.

Going forward, the company plans to invest US$ 200 m (Rs 16.4 bn) under the Africa fintech initiative for laying the foundation for a fintech ecosystem in Africa.

The company is committed to bringing African countries on par with 70 or more countries accounting for 95% of the world economy.

Further, the company is also expected to benefit from the fintech boom in India.

#4 Sangam India

Fourth on the list is Sangam India.

As of December 2022, the shareholding pattern of Sangam India shows that Madhusudan Kela holds a 1.1% stake in the company or 0.5 m shares in total.

Considering its current market price of Rs 214 as of 31 March 2023, Madhusudan Kela's total value in Sangam India is Rs 107 m.

Initially, Madhusudan Kela bought 2 m shares of Sangam India in September 2022. Since then, his holding has remained constant.

Since his investment in the company in September 2022, the shares of the company have declined 20% on the back of declining profits.

His bet on the company came in after the company reported its highest-ever revenue and net profit since its inception in March 2022 quarter.

This could be due to its well-established name in the textile industry as it is a leading producer of PV Dyed Yarn, Seamless Garments, and Seamless Fashion.

Sangam India is also a beneficiary of China plus one megatrend.

For the December 2022 quarter, it reported a 6.4% YoY decline in revenue to Rs 6.5 bn. Its net profit for the quarter came in at Rs 184.5 m, down 57.7% YoY, due to high input costs.

Going forward, the company plans to ramp up its production and increase its reach in India.

Further, with input cotton prices on a decline, the textile sector is set for a strong comeback in 2023.

There you go...these were the 4 shares held by Madhusudan Kela as per the shareholding data filed with the exchanges.

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