After a long stint of 24 years at Reliance MF, Sunil Singhania, in 2018, joined the start-up bandwagon. Thus was born Abakkus, which offers various products for HNIs across its AIF and PMS platforms. Having dabbled in markets for close to three decades now, Singhania, a CA rankholder and a CFA charterholder, has a vantage point that very few market gurus offer today. In an interview with BL Portfolio, he shares his personal finance philosophies, investment approach and experience, for the benefit of readers.
What does money mean to you?
‘Money is not everything’ is a cliched statement and may be, to an extent, it is true. However, we are in a materialistic world and for our needs and comforts, we do need to have adequate money. It is also a reflection, to some extent, of the fact that you are professionally doing things right. While making it is a satisfaction, bigger satisfaction should also come from utilising it aptly.
Looking back, you completed CA when you were 20 years old and were a top rankholder then. But instead of taking up job offers, you practised CA. Did being a CA make you take investing more seriously?
Having got an All-India rank, I did receive a lot of job offers from prominent corporates. However, I wanted to pursue my passion of being away from routine auditing, accounts, etc, that large companies were offering. Having my own practice enabled me to learn about entrepreneurship early in my career and it also made my foundation on accounting principles, taxation and balance sheet reading very strong. These surely aroused my interest in equity investing and also helped me to be a better investor.
At the beginning of your investing experience, you were known to have made a big profit in IPO investment of Gujarat Godrej Innovative Chemicals. For the retail investor, how is the IPO market of 80-90s different from today?
Rules have changed a lot. In earlier days, there was CCI that used to determine the premium a company could charge at the time of IPOs. Thus, they were offered at a big discount to their intrinsic value. Also, size of the IPOs should be smaller. Now, it’s a free market and companies can determine themselves the price at which they want to raise funds during an IPO. There are many interesting companies that are tapping the markets via IPOs, but my view is that there is definitely exuberance in this segment of the markets and one surely has to be careful about many of these IPOs, not because of quality or fundamentals, but purely based on the price that they are being offered at.
Being a fund manager, do you follow the same guiding principles when you invest for yourself as well as for your clients?
Investing is the same and the principles an investor follows are the same. While managing money for others, one is in a role of trusteeship and therefore it is more difficult. One has to be careful about risks as well as perception and also has to take care of near-term performance while investing for longer term.
What are the goals that drive you today?
An important aspect of equity investing is “Being Positive”. Our investment decisions are based on the optimism that India will continue to grow rapidly and therefore, returns will be good. At the same time, one has to be realistic about return expectations. From our side, the thought is that we should, on a risk return basis, do better than the benchmark indices.
Also, India is a country that thrives and grows because of entrepreneurship. we have thousands of passionate promoters and businessmen and new segments and businesses coming up. These offer investment opportunities as also creating alpha. In-house and extensive research is our mantra and long-term wealth creation for all involved is our goal.
What does your personal portfolio look like? What are the lessons you have learnt from the way you have handled it?
Ever since I turned an entrepreneur with the setting up of Abakkus, a large part of my investments is in Abakkus and its funds. I have some direct equity, predominantly in very small market cap companies as well as some in private companies. I do have some exposure to debt. I have realised that I end up ignoring my personal investments as full attention is in excelling while managing client investments at Abakkus. The biggest lesson is to let investments grow in a country like India that is visibly growing the fastest in the world.
What has been your most successful investment till date? What are the contributing factors?
Very tough to pinpoint. I have had multiple successes and many that have lost money. Of late, we were early to see the digital trend and some of our bets on the listed side in this space has done very well and contributed to very good returns for our investors. I believe that some of the new trends like digital, efficiency, renewables, environment, etc have huge multi-year potential. However, its not easy to find many stocks that are exactly under priced here.
You have seen an era when getting balance sheets was tough to today when a lot of the financial information about companies is easily available. There is an overload of information as well. How do you sift the wheat from the chaff today?
Data is available easily in this digital world. This has led to more transparency and many more analysts are now seriously analysing companies more extensively. Time commitment has surely increased. From our side, a combination of a large analyst team, multiple company meetings, interaction with sell-side analysts and being passionate and charged up every single day, is what helps. I personally read a lot, including balance sheets and this history of past meetings and company behaviour in different cycles also helps.
What are the all-season investing lessons that investors should remember?
A bull market is followed by a bear market which is followed by a bull market — this is what Sir John Templeton said. If you are an investor in a growing country like India, decent returns and wealth will surely be made over a period of time.