As an engineering student from Bhopal in the late ’80s, Neelesh Surana had a faint idea of how the stock market functioned. But he wasn’t immune to the IPO frenzy that was sweeping every nook and corner of the country. Tapping in, Surana ended up making tidy gains in a market, which was then riding high on the Harshad Mehta factor, albeit on a modest sum. Today, the 46-year-old manages Rs.2,700 crore in assets at Mirae, the South Korean financial major that entered India in the fateful year of 2008.
On completing his engineering, Surana landed up at Blue Star but soon realised that the job wasn’t half as exciting as he had thought, and finally quit to pursue his MBA from IIM Indore. After that, Surana shifted base to what was then Bombay in 1994, briefly working for Ashok Leyland Investment Services. He later on moved to research at a boutique broking firm, Dimensional Securities, followed by a stint with the institutional arm of IL&FS Investment from 2000 to 2003. But it was at ASK Investment Managers that Surana cut his teeth in fund management.
While he initially joined ASK as an analyst, it was in their PMS division that he learnt the ropes of fund management. Under Bharat Shah, the CEO of ASK, Surana learnt how to sniff a business opportunity, value businesses and the importance of return metrics in the context of growth. “Coming from the myopic world of sell-side, it was an interesting phase of learning under Shah,” says Surana, who quit ASK after five long years to join Mirae in 2008.
Given the long learning period and vast experience gained along the way, Surana has done a pretty good job in managing money, posting a return of 13% at the India Opportunities Fund vis-a-vis 6% by the BSE 200 Index over the past five years. With 300 stocks under coverage, Surana’s bottom-up approach lays a lot of emphasis on management and attaches even more significance to the nature of the business.
“You can be subjective about the management, but not about a business. If you look at a company’s past 10-year financials you can determine if it is good or not and whether the free cash flow is making a decent return on capital employed. Even in a business like commodities you can have a moat if you