About Basant Maheshwari

I make a living out of investing in listed securities. Equities have fascinated me ever since college (Harshad Mehta) days. Prior to being a full time investor I spent about six years working in my family business which failed because of political reasons. Thereafter I took up teaching for a brief period to generate income to feed myself while investing the surplus in the markets. I always wanted to become a full time investor.

My initial investing strategy was to back up emerging themes in non-tech businesses operating in niche environments. Broadly a top down player my investment calls had been essentially long term in nature and were based on some structural change visiting the industry in which that company operates. Basically I wanted to ride the boom of new sectors and this worked out very well till the time there were new sectors in the markets. It was in one of these endeavors that I made a 40 bagger from Pantaloon Retail and a 15 bagger from TV18.

My ideal investment bet is a company having:

• Dominant industry position run by able, honest and focused managers
• Strong entry barriers in a sector that provides opportunity for volume growth
• Companies that are taking away market share from competitors by growing faster then the sector
• Efficient users of capital (High RoE)
• Generating free cash flows (negative working capital and asset light),
• Reasonable payout ratio (dividends) instead of hoarding cash on Balance sheet
• Judicious capital allocation policy where new ventures are evaluated on the basis of incremental RoCE.
• Preferably smaller capitalized companies with a market cap of less then a US1 Billion and operating in a sector that is not growing too fast. Smart companies in dull boring sectors are what I like to bet on.
  

I want these companies to be available at reasonable (not necessarily cheap) valuations. In some cases where the valuations are not cheap I do take a bet assuming that the prospective earnings over the next couple of quarters will make the valuations cheap with increased earnings.

I like companies that do not meet investors throughout the year, restrain from providing quarterly guidance and are focused more on their business then on the mechanism that values the business (stock market). It is in these companies that one gets to buy companies with potential surprises!

As you would have seen I like betting hard with my money. In other words I do not prefer owning too many companies. To me 4- 6 businesses carefully chosen is enough diversification.

Presently I am backing the Consumer plays in India.

I do not advise others and manage my own/family funds. I also enjoy teaching and have been a visiting faculty to the various courses conducted by the National Stock Exchange and am a visiting faculty to the Indian Institute of Foreign Trade (IIFT) for their MBA program.