Vijay Kedia is undoubtedly among the most successful stock market investors in India. When he started equity trading, he was only 14. And, this is perhaps the most amazing fact about Kedia. Many well-known investors across the world always encourage to start investing early. According to them, if a person begins share trading at an early age, then, the chances of becoming successful in the stock market are much high. Moreover, such persons would be at an advantageous position of refining their equity trading strategies and investment strategies much ahead than persons who start late. Vijay Kedia is one such person and being an early investor has helped him in building a good fortune for himself from stocks.
Once in a conversation, Kedia revealed how he learnt a lot at a young age from his investment mistakes with smaller risks at stake. When Vijay Kedia entered equity trading, he started with only Rs. 35,000. At present, his portfolio value is believed to have crossed Rs. 200 crore! Kedia’s story is an inspiring one for those who want to make a career as equity traders and investors.
Vijay Kedia’s initial days in Equity Trading
Although Vijay Kishanlal Kedia started trading in stocks since the age of 14, he, however, had to trade using his family members’ trading account. When he became 18 years old in 1978, he got a trading account for himself. Kedia was born in a family where most of the earning members had a stock broking background. His father and grandfather were both stock brokers at the Calcutta Stock Exchange. Hence, it was quite apparent that Kedia would follow their footsteps. However, to make a career in equity trading was never a prime choice for him. He entered their family business of stock broking mainly because of his father’s death when he was 18, and young Vijay Kedia had to support his family.
For the next 12 years until 1990 Vijay Kedia traded stocks at the Calcutta Stock Exchange. This period was a great learning stage for him. His investments sometimes fetched him decent money and sometimes he was also losing money. To be more precise, Kedia’s earning from stocks was not enough to earn a living for the entire family. He even had to start tea supplying business alongside stock broking. At one point of time, Kedia experienced more downs than ups. He learnt that stock market trading is never an easy way to make money.
Vijay Kedia’s unsuccessful attempts in some of his equity trading decisions helped him learn the art of cutting losses.
While narrating his experiences he once told Business Standard, “Even after losing 7 out of 10 times in trading, I would not be in net loss as my losses were shorter than my profits. The one and only precondition for trading in stocks is to cut the losses.”
As Vijay Kedia was bettering his stock trading decisions, he came across one of his old friends S.P Modi who inspired him to invest in the share market. Modi, by then, already pocketed a couple of multibagger stocks in his portfolio. Following his stock recommendations, Kedia invested in stocks of different companies. Within few months, the investments started multiplying themselves. During this time, Vijay Kedia himself spotted good potential in Punjab Tractor. With a limited amount of money, he bought it for Rs. 50 per share. In 3 years time, the stock price of Punjab Tractor appreciated by more than 10 times.
Relocating to Mumbai and the struggles
In 1990, Kedia relocated to Mumbai with a saving of Rs. 1 lakh. One of his friends, Sameer Kedia, helped him in his entry at Bombay Stock Exchange. During his initial days, he stayed at different paying guests. He kept on changing his accommodations when the landlords increased the rents. For him cutting down and minimizing expenses was more important. Vijay Kedia used most of his savings for purchasing stock of different companies. The first few years in Mumbai was full of challenges for him as his stock picks failed to give him decent returns.
Picking up ACC in the portfolio
In 1992-93, Kedia finally managed to spot a stock that had good potential. It was ACC which was trading at Rs. 300 per share. Kedia sold the stock after 1.5 years at Rs. 3,000. Since he picked up a large number of shares of ACC in his portfolio, Kedia managed to reap huge benefits from the trading deal. With the earnings, he even bought his first house in Mumbai. This was Kedia’s first major success in the stock market and it instilled in him huge confidence.
During the late nineties, he came in touch with Rakesh Jhunjhunwala. The association with Jhunjhunwala helped Kedia in strengthening his investment strategies. He understood that that to become a successful stock market investor, one need to focus on developing the skills of making good investment strategies. He realized that short term equity trading strategies only help in smaller runs; but, it can never help an investor become successful in long terms.
Including Aegis Logistics in the Vijay Kedia Portfolio
In 2004-05, Kedia identified stock of Aegis Logistics which was trading at Rs 20 per share. Following Jhunjhunwala’s advice, he bought 5% stake in Aegis Logistics. It was something which he did for the first time in his life. For the first one year, the stock price moved up only a little. But when Vijay Kedia exited from Aegis Logistics, the shares were trading at around Rs. 300.
Learning the importance of a Diversified Portfolio
In the next few years, Vijay Kedia learnt the art of portfolio diversification. A diversified portfolio increases the stability of investments. A diversified portfolio also helps in reducing the risk of losing money. Kedia also concentrated on identifying the top stocks to buy after going through the financials and stock charts of different companies.
“One should neither put all eggs in the same basket, nor should he put an egg in each basket. So there I learned to concentrate on the whole market; identify say 50 scrips and select one. Keep a long-term vision of minimum 5 years as it takes this much time for a small company to become a medium company,” Kedia once told in a conversation.
Entering the undervalued stocks of Atul Auto and Cera Sanitary Ware
Vijay Kedia’s some other value stock picks include Atul Auto Ltd. and Cera Sanitary Ware. Atul Auto was among the undervalued stocks that was worth buying. The company in the 1990s brought some exceptionally good and efficient 3 wheeler vehicles in the automobile market. The management also had a clear vision to establish themselves as a national player in the automobile market. When Kedia entered the stock the company was in the process of setting up a high-class state of art manufacturing unit to produce Rear Engine 3-wheeler vehicles. Kedia spotted that Atul Auto was among the undervalued stocks that others didn’t notice. When the company rolled out the products, they got immense response. The stock price rose by more than 7 times in the next 5 years.
Vijay Kedia entered Cera Sanitary Ware around 2006-07. He invested in the stock for 2 reasons – steady growth and modest dividend. Moreover, like Atul Auto, it was also among the best undervalued stocks that was available at that time. A booming real estate market was also helping Cera Sanitary Ware in scaling up its business operations. Vijay Kedia’s stock picking strategy for Cera Sanitary Ware turned out to be successful. This stock too gave him more than 7 times return in 5 years.
Also Read: How you can Make Money in Stock Market!
Vijay Kedia’s other Multibagger Stock Picks
Vijay Kedia bought picked up stock of Dish TV, Godrej Properties, LIC Housing Finance, TRF Ltd., etc at different times. And, each of them went on to become multibagger stocks.
Vijay Kedia has gone through lots of highs and lows while dealing in stocks. But, even during the tough times, he never lost hope and determination to succeed. He feels a high academic degree is not always important for becoming a champion stock market investor. In order to excel, one should learn from the investment failures. Vijay Kedia’s success story in the share market is undoubtedly an inspiring tale of reaching the top by defeating the failures!
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