Institutional Hands: Examining their role in sustainability of enhanced valuation!

Hi Guys,

Gautham U energised me in takingthis thoughtprocess forward in a formal way - by opening it up to the young ValuePickr turks.

Some of my observations from my direct/indirect experience to get everyone on the same page and excited to finally nail this one:)

1). In early 2010/2011 Fund Managers friends and their ilk - would listen to me patiently as I passionately described some strong emerging businesses with sustainable superior earnings profile like Mayur, Astral, Suprajit and the like

2). They were polite with me and gave me more than an hour each time - mainly due to our passion - and that we would usually surprise them - with a few pieces of X-factor info that would suddenly make them perk up

3). This wouldn’t last for too long, as the discussion would inevitably flow to first size of business and then to Public Float, Liquidity, etc. “Even if we want to, how do we participate”?? the common refrain.

4). In the initial days, I would be stumped at this very practical question - but eventually (6m - 1yr later, again when I met them) I learned to say - “Sir, usually these things have a way of sorting themselves out - if the business keeps performing”. (borrowed wisdom of Mr D!). And now they would all nod their heads, and amazingly be willing to investigate/pay a visit - of course the sustained performance of past year didn’t go un-noticed.

5). Mr D’s aphorism - “These things eventually have a way of sorting themselves out - if the business keeps performing” found a strong resonance with all practiced market hands! As it does now for me - completely (earlier I was just mouthing it:) - as I relive our direct/indirect experience with strong businesses - the likes of Mayur, Astral, Suprajit and…

6). Now apart from sustainable of superior earnings performance and Management walking-the-talk etc, what comes (should come) into sharper focus - is also Management’s thinking/drive and willingness at Value Creation. Sometimes they will be trying to do these things much ahead of time (business size/visibility/performance or scale up) not yet opportune like Suprajit, or just with the right focus at right time (like Astral - now there is over-focus perhaps)), or like Mayur a little slow in the uptake, but sure and steady.

7). Thinking/Drive/Willingness at Value Creation - (when backed up by solid business performance - that comes first of course) - come from a slew of Corporate Actions - first aimed at increasing Liquidity - such as Splits, and Bonuses (also enhancing Equity Cap from Reserves). These may be much maligned as “not really adding anything to the business” - but as Corporates move steadily in that direction - this is what allows larger Institutional Hands a toe-hold - and value creation aspirations of solid emerging businesses get off to a start. The starts will be false starts of course :slight_smile: if the business is not moving up simultaneously to the next level.

8). Other Corporate actions that drive this value creation forward - we have seen Mayur and now MPS doing this very very effectively - is by way of strong quarterly Dividends. This role is obvious and should never be underestimated. But without the absence of “Liquidity” it is mostly Retail/HNI strong hands that benefit first. Institutional Hands CAN move in next when the Business moves ahead to creating more liquidity. Obviously it is more advantageous for Retail/HNI strong hands to spot this early and take advantage of - by steadily accumulating - with each leap of business performance. Period!

There lies my Thesis :slight_smile:

Now can we have some of the young turks put up their hands -and take this assignment forward. Please present actual data and the sequence of events that led to enormous Value creation in strong emerging businesses that you are familiar with/or want to take up…like Mayur, Astral, Suprajit that I am familiar with and others like TTK, Hawkins and others that I am not so familiar with.

Cheers! All this appears so simple and logical, but to get really clued-in and take real advantage of - requires deliberation, enthusiasm, passion - Hope I have been able to transfer some of my enthusiasm.

Now for the Data! And over to the Young Turks!

Young Turks like Dhwanil, Omprakash, Rudra and other young enthusiasts like Utkarsh Patel, Sagar Saxena, Suryakanth, Prasanna, Subash Nayak, Ankit Gupta and their growing ranks (very promising but who (pardon me, please) in my opinion are yet to demonstrate that passion for detailed data-mining benefits).

if I missed some obvious names here, as I must have …I might be considering you already as practiced hands :slight_smile: or(please excuse me) just my failing to notice! My taking some names publicly - is for 2 obvious reasons

a) acknowledge their growing contribution to the community formally - in the absence of Reputation System tech, I run the risk of failing some equally deserving - how I wish we could ramp up on that asap - Inshallah!

You can ALL help rectify my failings - by encouraging and acknowledging other sustained value-creators, please!

b) bring in that much needed energy and passion - every discussion needs a driver!


I see no contradiction in institutional investors not entering awesome but small cap company even if they seems mouthwatering. The reason is what I call “small pond hypothesis”, which tells that trawlers cant be used for catching fish in smaller pond, however fulled it is with fish.

If you see from a institutional investor, who has a large kitty with him (say 2000cr) and stumble upon an excellent business, which is of 200cr Mcap, 75% promoter holder. So the non-promoter holding will be 50cr odd, out of which 20-30cr will be hold by smart guys like Donald/Hitesh/Ayush :), and the remaining 20-30crs by the rest tinny investors.

So, the big guy can invest 10-20cr (which is less that 1% of his kitty) at max, at the same time causing the stock to skyrocket to different orbit, eroding future gain potential. So he has 3 big disadvantages with the company:

1> Cant have a meaningful position, 100% gain on 0.5% of portfolio will cause just 0.5% gain in overall pf

2> That 0.5% holding can’t even be bought at the attractive valuation as the stock price will go up sharply

3> He need to track way too many cos, which all are 0.5-1% type weight of pf. Huge effort

So, they will listen you carefully, fully appreciate it, and still cant taste the sweet fruit (may be getting envious of you because of this).

Small investors/medium investors dont suffer the above ailments, and hence can reap rich rewards from the type of mayur/ajanta stock.

Mr. D’s comment also make perfect sense, as a consistently growing company results in consistent increase in eps, increase in Mcap, increase in free float, and slow and steady entry of guys with increasing pocket size :P, pe expansion. Towards the end of such awesome phase of the party, the big guys will arrive :).

So, the beauty of the game is to find stocks which are slowly getting ripe for entry of medium/big pocket guys, and just remain invested till the party is over.

Btw, I see no advantage of stock split, bonus on entry of big guys. Bonus, due to its tax advantage can result is increased in trading amount for short term, and an increased volatility of the stock. But the pool of the free float available for big guys doesn’t increase by these actions.

Consistent dividend brings confidence in management, and also increase stock value as price is directly proportional to dividend in DCF. So, it will attract bigger guys along with consistent growth.

Since I am most familiar with Alembic Pharma…

The company started off as a tinctures & alcohol manufacturer,way back in the early 20th century,in Gujarat.In 1940,the company forayed into the manufacture of cough syrups & anti-infectives.Alembic also holds the distinction of being the first company to launch Erythromycin in India.The management seems to have lacked focus,even as another Gujarat based company,went miles ahead(Sun Pharma),inspite of a 70 year age gap.APL continued to take up new things at a slow pace…manufacture of organic APIs started in 1999 & their first Cephalosporin came in 2001,from the ISO cetified facility at Vadodara.The big leap came when Alembic acquired the Non-oncology biz. of Dabur India in 2007.This was probably the first instance when the Alembic management showed the much needed intent.Only 11 ANDAs had been filed upto this point.The efforts picked up momentum in '07,as the company filed 7 more ANDAs.Upto 2012,it had 57 ANDAs filed,with the USFDA,giving an average of 9-10 ANDAs/year from '07.So,in many ways,2007 marks the inflection point of APL.
Notably,the de-merger in 2010,provided renewed vision to the independent entity.The APL management carried out restructuring of its drug portfolio,to push up profitability & sales.Their vision is clearly chalked out in the 2013 AR.The targetted 35%+ Sales CAGR in the US markets & the intent to grow margins by 100 Bps/year sounded pretty ambitious,but the company has come out trumps.The big kicker came in when they got approval for the ANDA for generic Pristiq.Even though the drug is yet to add substantially to their Sales,it proved theirR&D capabilities.The approval was more beneficial to the stock price though,since it permanently improved liquidity.
The profit CAGR in the past 3 years(since de-merger) has been in excess of 30% & the company has done well to prevent margin erosion,inspite of the adverse DPCO ruling.In the domestic markets,APL has targeted chronic ailments & grown market share in Gynaecology,Cardiology,Ophthalmology & few others.Thus,successfully using its brand reputation.The co. is a new company now,a far cry from the earlier sleepy Alembic.The continued focus on R&D capabilities(reflected in rising spends) & a level-headed approach to growth should drive the company further.On the financial front: Interest expense has steadily reduced & Free Cash Flow generation has picked up.Like any investor-friendly company,APL gave much higher dividends in this financial year.The next leap for APL will surely be their foray into US markets,on their own.Setting up of a Sales network,training of MRs & still maintaining margins & containing costs.The good thing about the company is the clarity of thought,due to which the management is able to communicate effectively with its Shareholders.In a recent interview,Mr. Baheti explained how serious APL is about the USFDA issues & is taking all the necessary steps to ensure quality at manufacturing facilities.Even when the DPCO ruling was carried out,Mr. Baheti came out & stated how much APL will be impacted.These are all good governance practices & show that the company values its Shareholders.A clean image goes a long way to drive re-rating when markets take note.For instance,the stock of Maruti has been suppressed recently,cause of Governance concerns.I believe one big stimuli for re-rating is the management quality.Even in adverse times,such cos. will rule at higher multiples since there is no trust deficit.

Donald,I am quiet sure the above won’t match your expectations.But I find myself at odds,mining for data.I pay the greatest emphasis on Corporate Governance,and maybe that’s the mindblock I suffer from.You know,if I am assured about the management,I become laid back & less attentive to detail.I remember one ValuePickr who unravelled the details of Shilpa Med.'s subsidiaries when you had asked for.I just can’t get myself to do such stuff.Not that I am less passionate about a company,but this meticulous search for detail somehow,doesn’t excite me that much.On a lighter note,it maybe because of the frustrating Internet speed at my disposal :slight_smile:
It would help all of us I think,if you could tell us how you got sucked up into this fetish for detail…How exactly do I decipher what to search for? A case in point: If I could access the names of all molecules/drugs in APL’s pipeline & find their respective market size & margin profile…would that be good? Or should I study the Financial history in more detail? Earlier I had started a thread on PVR,can you point out the follies with that analysis.What all did I miss,etc.? Am I arrogant in some way(which prevents me from doing greater work)…I am sure you would have made a character sketch of all of us by now. :slight_smile:

Gautham asked why pe re-rating happens and then valuations sustain/settle at a higher level even in periods of flattish even negative growth. and if i understood donald correctly his answer was -the clue lies in the stock moving into stronger hands - first long term retail and HNI investors who are very very reluctant to let go of something like a Hawkins even after few topsy-turvy qtrs, and then the real big jumps happen on insitutional entry in a small way.

is that right? if yes,I think what donald is looking for/expecting is corporate action data (splits/bonus/dividends) and the correlation with the big jumps in valuation as he mentioned…

Exactly when did the big jumps in valuation happen - is there a correlation with splits and bonuses and dividends. we can examine for a few companies and put up such data points of the corporate actions and big jumps in valuations

not anecdotal or known gyan on corporate actions…that is available at many places. not even specific company historical data or product pipeline data…this is about valuations jumping as the stock sees more stronger stable hands…and sustaining at higher levels …after each jump.

Hi Donald,

Once again, a very good topic to deliberate upon! Peter lynch beautifully articulates why smart money is not so smart! At the same time, participation of smart money can swing the pendulum to the “undue exuberance” and helps the early investors realize the highest possible gain! Most of us may know here the limitations (as Subhash very lucidly summarized) of smart money and why we as small investors have an edge over smart institutional investors. The pertinent points here to discuss can be

  1. How the participation of institutional investors narrow the gap between price and intrinsic value? Does it always result into P/E expansion? If so, how do we empirically prove it? (some of the data points we can look for, analysis of Institutional ownership; P/E ; NP growth over a decade; Some counter examples, if any,where in spite of participation by institutional investors P/E expansion never materialized! )

  2. Given that the business performance and fundamentals of two small and growing businesses have similar trajectory, Do Institutional investors demonstrate preference for investing in one business over the other? If so, what may be the contributing factors which tilts the decision of the institutional investors? Apart from business fundamentals, what proactive actions by management gives enough confidence to the institutional investors for taking an investment decision?

Data points: Correlation between dividend payout/liquidity improvement measures (bonus/split)/regular updates interaction with market participants through concalls/analyst meets and institutional participation. Are there any turn offs? retention on books without deploying it in business)

  1. What is a typical threshold scale required before institutional investors start looking at the company/business seriously?

Data points: e.g Sales growth from 30-150 crore - what is institutional participation vs. 150-500 crores and 500 -1000 crores? Do institutional investors have more inclination towards large opportunity size (the hunch of course is yes, they have!) Do they ignore the company, even if the business performance is excellent, if opportunity size is limited?

Obviously, this is by no means a complete exercise, but just an ice-breaker! Thought process that is going through my mind is that,

)- it may be more useful to look at companies that have grabbed the attention of institutional investors relatively recently and were relatively small 10 years ago (TTK;Page; Amara Raja; Pidilite)

)- We need to have large enough sample to ensure that inference we draw hold true for large set of company and truly gives us some insight about the thought process of institutional investors.

)- Thereafter we apply the insight into current universe of VP companies and see which among the set is likely to move towards sustained and enhanced valuation due to institutional participation?

Opinions/suggestions welcome.

Best Regards,

Dhwanil Desai

From my limited experience of working in an investment company (worked in one of the largest Life Insurance company of India), one of the major factor which the fund managers look at is the market capital of the company in which they are investing… We need to understand that institutional investors have large chunk of money (my former company had AUM of 30,000 crore in equities). I remember when I spoke to one of my colleague about Mayur Uniquoters two years back he said that it is one of the company in which many of the fund managers have invested their own money but not of the fund… I think they have a threshold of around 500 crore of market capital once a company crosses it and it keeps on performing well the P/E will undergo significant re-rating (assuming company keeps on performing well)

Guys,inspite of your fantastic posts,I think you have got Donald wrong.He wants us to 'present actual data and the sequence of events that led to enormous Valuecreationin strongemerging businesses**…’ **It makes more sense when viewed in conjunction with his recent posts.He wants us to give evidence of our analytical abilities & take up one company each,as an assignment.How convincingly are we able to put our views forward? How passionate are we really about companies & analysis? How convincing was the data to have told us about the quality of the business,early on? And other such qualities.
Though,mind you,I already have the first mover advantage. :wink:

Hi Donald,

I would like to share various events which happened in Ajanta Pharma, as it has highest allocation in my portfolio and various turn of events which happened in the course of the company. My experience would be more regarding the liquidity and market perception angle . I started to track Ajanta initially after reading an article in Dalal street, I had started investing but was just beginning at this stage. Wasnât fortunate enough to be aware about VP at that stage which would have helped a lot.

Following data may help us better in understanding how the story transpired with 3 factors: increasing sales, higher margins, PE rerating, all supported by improving liquidity.


Total Share Outstanding (lacs)

Free Float (lacs)

FF %

FII Holdings (lacs)


No of FII

Daily Volume (avg of quarter)

Share Valuation


Result day EOD Price (Adjusted)

Sep -11




































































































For share valuation forward PE, earnings till that quarter of year has been annualised, eg for Dec-11, 9M earnings till that quarter are annualised to get forward PE. For March Quarter, PE of the past year is shown. Average Daily Volume includes average of sum of both NSE BSE combined. Free float is the amount of shares in public shareholding

As business was able to scale up from sales of 604 cr in FY12 to >1000cr in FY14 with improving margins, market re-rated the stocks from valuing it at 0.85x Market cap/sales ratio to >3.5x Market-cap/sales ratio and also re-rating PE from 7-8x to 15-18x TTM earnings.

As company crossed the threshold of 500 cr market cap (~140 Rs/share),FII increased holdings to 1.33%. After crossing 1000 cr Market cap (~280 Rs/share), FII holdings has doubled from 1.33% to 2.74%, of which most of increase has come post company moved above 2000 cr market cap. FII holding has improved by 0.5% post crossing 3000 cr market cap landmark.

% of free float has decreased due to promoter stake hike but volume traded has improved drastically in last year. The stocks moves from weaker hands of Retail to stronger hands of HNI & FII, this may explain why stock seem resilient even after one odd bad quarter whereas tolerance earlier for bad quarterly result was low.

I interpret that market cap increase with higher liquidity by higher no of float shares through splits and bonuses and excellent fundamentals is a nice recipe for increasing his stake from FII perspective who was unable to enter due to size constraints till then.


Bravo Guys!

What a super bunch of next-gen thought leaders we have at ValuePickr. I continue to keep getting at amazed at the confluence of such talent - at a collaborative research experimental platform like ours. Guess, it springs from the sincerity of purpose -that binds most of us together - it is the genuineness of intent - sharing, learning together - and more importantly functioning as a Team - ability to recognise and acknowledge complimentary strengths - and evolve how to utilise each guys/gals natural aptitude - at the same time not failing to highlight - the required focus of the job - the best examples of who are getting it just right - what needs to be done more, and the like.

I have to only motivate right:) (in the words of my first real Corporate Mentor - who opened my eyes to how not to micro-manage (to get eye-opening results). So job done for the day. I have only to give the overall direction - if you are going too fast, ask to slow down; if going too slow, ask to speed up; if going off-the mark, bring the focus back on track :slight_smile:

I think it must be apparent to all now, where this is headed - by the quality of inputs that have come in. Utkarsh Patel’s post is the ‘defining’ post of the day as it captures most of what we wanted to see. (Ajanta is just a mind-boggling example - glad to see our young enthusiast picking it up and exemplify it with a poise & grasp that eludes many old-timers in the market).

Let’s get in more case-study examples in similar crisp, easily understable (& undisputable) format like Utkarsh’s (facts/data speak louder than words). Thanks Utkarsh for showing the way forward - I loved it! Tracking Mcap/Sales is a better measure for this exercise, as you have rightly done.

Will request one of our deepest thinkers Abhishek Basumallick (from Kolkata; anyone there MUST meet him) to also keep guiding & mentoring these discussions. He got busy I guess (hasn’t been able to post here yesterday) but I can’t seem to wait - resist quoting a crisp 4 liner he sent me on his experience with Supreme - to set the Tone for further work.

"Supremedid astock split (1:5). Also, dividend payout ratio is very high … .close to 375% (Rs 2 FV). So, they have been very proactive in boosting liquidity to attract institutional investors. FII holding has been going up continuously from near 0 levels to 19-20% now.


All this has meant a re-rating from 8-10 PE 5 years back to 18-20 today."


Like to end today’s post with another directional input. The first filter we apply is Excellent improving Fundamentals - that is a GIVEN. So we only take the best examples of value creation that we may know of - and look for the supporting/enabling evidence around our Corporate Actions hypothesis - that made the value unlocking possible.

Great details brought forward by Utkarsh Patel.

Would be interesting is someone can supply data for Mayur Uniqouters… I think it underwent similar and at the current stage higher re rating than Ajanta… Probably due to higher dividend payout and calibrated expansions by management.

Shilpa Medicare can be another candidate worth considering. it remains illiquid till date and still has undergone significant re rating.

I think we have a divergent market currently. Quality is getting more and more expensive while the poor quality or poorly perceived companies continue to languish.

How long this frenzy for quality continues needs to be seen.



This is a typical behavior at the ending stages of a bear market and a beginning of a bull phase. When the bull phase starts, the focus on quality starts to diminish and then everything starts going up :slight_smile:

About various market confidence building exercises, I think PI Industries has also done a fair bit.

I remember they had 2 splits - one in 2011 and then again in 2013, that reduced the FV from 10 to 1. They also had a bonus issue in 2010. Dividend payout frequency has been increased from once a year till 2011 to twice.

Thanks Donald for encouraging us to dig deeper for data and trying to create a model for value creation & sustenance by taking advantage of institutional constraints !

Amazing discussion! Donald, you have been the instrumental force behind this, encouraging all to get into the discussion. We have a great flock of young turks, who if contribute on regular basis, can make a big difference and add a great value to the forum.

Thanku Utkarsh…

Donald we may have to look at FDI and then into FII since FDI are more stable and have lock ins… Andmay be insurance/pension funds and sovereign funds…

FIIs are hot money…

Direct investment by a foreign entity or being one of the promoters may stretch the value a bit higher and sustain it a bit longer…




For tables -

1). The best formatting in the messageboard - is when you use the Table Icon from the formatting options that appear above the text box. But you cant copy from excel/word directly there. You have to painstakingly enter each cell row-wise column-wise. I do that for all my structured communications.

2). The next best is to copy Excel/MS Word tables here. But make sure spacing is not too compact. If spacing is adequate say 10-20% more than the cell entry width, this type of distortions don’t come. Also column alignment is better (more spacing between adjacent columns after post) if Text is center-aligned rather than left or right-aligned.

In future we have to make these things self-correcting, idiot-proof; kindly bear with the pain and continue the enthusiasm. As communicators, it is always worthwhile when you take some extra pains to make sure - what you want to communicate comes across exactly as you see/want it to show up - notwithstanding the system limitations.

Year(Dec. figures) FII Holding Insttl. Holding Free Float MCap/Sales PAT
2001 0% 14.77% 1.47cr. 0.15 7.5cr.
2006 16.36% 28.4% 7.35cr. 1.02 36cr.
2008 0.14% 1.64% 7.35cr. 0.45 20cr.
2009 1.43% 3.06% 7.35cr. 0.3 12.75cr.
2011 7.16% 15.79% 7.35cr. 0.63 89.5cr.
2012 15.47% 19.87% 7.35cr. 0.97 117.5cr.
2013 25.61% 29.39% 7.35cr. 1.28 104cr.

The data is for Kajaria Ceramics.A company that I don't have positions in,but is one of my favourites.

The above data very clearly shows how instituitions chase growth.As long as the performance was erratic(brand was still there!) the FII holding was 0%.From 2002-06,the PAT figures read: 3cr.,10cr.,17cr.,31cr.,36cr.It is easy to see that KCL would have had some temporary problems which it fixed & the PAT improved drastically.FIIs came chasing & the holding peaked at16.36%.Correspondingly,the MCap/Sales ratio shot past 1.KCL again showed de-growth & FIIs vacated it in large numbers...the holding troughed at0.14%in '08.However,as the company states in its AR,KCL has continuously transformed itself to become the market leader.Their understanding of the market,improving distribution network,penetration inTier-II/Tier-III cities,consistent Sales growth & improving working capital cycle have all led to renewed Insttl. interest & re-rating.Recently,their Foray into Vitrified tile segment has also paid off & the management has smartly increased capacity through acquisitions.The PE band has graduated & probably 14-15X will be the floor.Being a quality manufacturer & market leader,KCL should continue to command premium multiple.Though now,the growth will have to play a bit of a catch up with valuations but re-rating will certainly continue.Inspite of relatively modest liquidity,the stock doesn't fall drastically these days,indicating a clear shift of Holdings,to stronger/bigger hands.The recent insttl. interest in the Sanitaryware segment has pushed the MCap/Sales ratio of KCL to an all-time high level of 1.3!

In KCL's case,the re-rating has not been fuelled by greater liquidity,but to a larger extent,by consistency in financial performance.

Hope the table is clear this time. :)

:slight_smile: Super! Sagar!

I had resolved to intervene only once daily, but thought of sharing this important piece of communication form Mr M to benefit everyone immediately, especially as I see not everyone is yet on the same page.

We are NOT trying to track Corporate actions - to identify valuation enhancement candidates.

We ARE trying to examine how much of a role Corporate Actions of increasing liquidity and consistent high dividends etc play in a high-quality small business that keeps performing and going on to the next level. NOT the other way round.

Sharing Mr M’s comments as he penned down for us, to bring all of us on the same page again also from a Institutional ownership perspective. Useful to keep these in mind as we go about our identified job - for this thread.

Institutional ownership is less talked about in fundamental analysis but important in discovering the valuation. Btw, I thought most of VP investing is pre-institution phase of the stock lifecycle.

Iâd be wary of painting all institutions with the same brush, there are many animals there.Overall institutional holding is of limited interest to me, just one of the data points. Composition is more important:

(i)FII Investingis opportunistic money in & out. Kicks in when stock is well covered. Company creating stock liquidity thro splits, follow-up issue, bonus is a pre-condition, and not other way round. On way-out, their exit can also puncture the stock as seen in IDFC.

(ii)DII Investorsare present if their parent/banking arm has initial exposure on the company in some way; On investing merits, DIIs like LIC are often late entrants.

(iii)Tactical Foreign investoris the key and what is to be tracked. It is based on specific info normally on diligence done. Prem Watsa in Thomas Cook or even as smaller examples Amansa (Akash prakash) in Persistent; Nalanda capital (Prasad) in Supreme & Kewal kiran can re-rate the stocks. But sometimes their calls may also go wrong like Helios capital (Sameer) in Arshiya.

(iv)Tactical Domestic & HNI investorsare well clued too. They may have good insights into the business trajectory and sometimes strategic intents. Say the likes of RJ & Mankekar (in financial investors) and Piramals & Mahindras (in strategic).

(v) MFsare generally herd, too much peer driven, their having specific insights is infrequent. Their presence means stock is firmly on the circuit, MFs have to sell due to redemption pressure from end-investors rather than poor performance of the company.

(vi) PE Fundspresence as a category when they are early investor or pre-IPO is most difficult to decipher. It can drive business targets & improve functioning of company as they are on Board of directors and involved much more for return on capital. On flip side, it can also put it under pressure in a negative manner. Success rate of PEs in terms of blockbusters is less than 50%.

Liquidity is a different topic. MCap of 1k cr is where foreign investors are generally ok to come in. I doubt if liquidity alone can re-rate a stock durably. For example, if we look at Shilpa, it has good institutional interest for a company with small equity base and PE is already reached 18-20 range.

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Donald on a lighter note do you/Mr.M see me as a little guy who reminds Mr.M of his younger days:-), since i was almost there regarding Institutional Investors in my previous comment( FDI and FII )…

Mr M’s clarity by these lines are a beauty "Composition is more important "…

Seniors- Your encouragement/guidance/straight talk means a lot and if you feel, i have the potential… Please let me know… It will make me work harder/contribute and tie my loose ends…