Swing for the fences. That’s the mantra Nalanda Capital follows when it sets its heart on a company. When the Pulak Prasad founded investment firm likes a business and the management, it does not sit quietly with a few thousand shares. Its investment approach involves grabbing a large stake and sitting tight until the cows come home. Most often than not, we are talking ballpark 10%.
After grabbing headlines for turning a $300-million bet on Bharti Airtel into $1.9 billion for Warburg Pincus in 2005, Prasad founded Nalanda Capital and has stayed true to his investment strategy. He has made successful bets on companies such as Page Industries, Berger Paints, Mindtree and TTK Prestige to name a few. For instance, he bought 8% stake in Page Industries in October 2008, when the stock was trading at Rs.430. It bought some more and it was only in 2018 that Nalanda trimmed its holding around Rs.23,000! It still holds 7.56% in the company worth Rs.17 billion and is just one of the many multibaggers in the portfolio. Although the return on some of its bets such as DB Corp and GE Shipping don’t seem spectacular, in GE Shipping it has recovered more than half its investment by way of dividends. Even with DB Corp, dividend flow has been regular but unlike in GE, it is now trading below buying price. Still, for Nalanda Capital, the wins outweigh the laggards by a large margin (See: Triple crown jockey).