The Hindu Business Line : <I>Early exposure to equity pays </I>

He humbles us at the outset by saying expansively: "Whatever wealth I have created through the equity market, it is thanks to Business Line. From 2001, I've been following your recommendations and have profited hugely."

We met Mr Ramesh Maheshwari, President and CEO, Texmaco, at the launch of Business Line's Kolkata edition, and soon discovered that he has a sound investment strategy and a disciplined approach to thank for his "phenomenal returns".

In 2001, Mr Maheshwari invested in a set of mid-cap stocks (Rs 30-50 range), and most of them have been `multi-baggers', giving 700- 800 per cent returns. His investment strategy is well defined — keep 70 per cent of your money for the long term and 30 per cent for the medium term. His initial foray into equity began in the early 1950s, and HLL bought in 1952 has given him over 100 times return. So did he book profits in any of his original scrips? "Not at all; I'll never sell those shares because I consider them my family legacy." He has passed on his "investment legacy" to his son, a chartered accountant who heads a company, by advising him to invest in equity and build up a portfolio.

When the market corrected sharply in May, Mr Maheshwari remained invested, "not panicking; in fact, I put in some more money and asked my son to invest in stages, putting in 10 per cent at a time. But he was able to invest only 50 per cent as the market recovered sharply too," he says.

Interestingly, he does not have too much faith in mutual funds. "As a manager, I don't like to be managed by others or go by their judgment," is his simple philosophy. But eight months ago, a leading MF house persuaded him to put in Rs 50 lakh, a decision he regrets because "in eight months they had made a profit of just Rs 4 lakh".

He could have done much better! His advice to young investors: "Invest in equity from an early age; keep 10 per cent of your money for speculation, 65 per cent for the long term and 35 per cent for the medium term.

"But he advocates caution as the Sensex is at an all-time high. "I'd say keep your cash handy, there will be some trigger or the other for the market to correct — be it a natural disaster, a terrorist act or the crude oil touching crazy highs."

Such opportunities should be seized to enter the market or increase your exposure to equity, says the ace investor, who recently hosted a party at his house in Kolkata to investment guru Mark Morbius.

RASHEEDA BHAGAT

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