Markets at new high: What does Rakesh Jhunjhunwala's portfolio look like?

Both small and mid-cap indices have fallen even as the market has hit new highs, but the big bull keeps buying

Rakesh Jhunjhunwala seems to love the small-cap segment, despite it having underperformed the market in recent times.

There are twenty one small-cap stocks in his 30-stock portfolio (based on public disclosures). There are also seven mid-caps. Only two companies are among the top 100 companies in terms of market capitalization, the regulatory definition for large-cap companies.  These two large-caps account for 51.13 per cent of his holdings. But smaller companies are catching up with small-cap and mid-cap companies account for 48.87 per cent of the total value.  

The data is based on companies for which the exchange has disclosed holdings. Business Standard looked at holdings under eight different names (including a few misspellings) to cull out the value of his quarter-end portfolio. This included his name, the name of his spouse and various permutations of the same. Stock exchanges disclose the name of the shareholder if the stake crosses one per cent. This also means that there might be other holdings where Jhunjhunwala’s stake is under this threshold and hence was not divulged. However, the disclosed portion is alone worth Rs.123.33 billion as of June-end and is likely to account for a significant chunk of his overall portfolio.

OVERALL PORTFOLIO

The trend in the latest quarter suggests that the portfolio is heading lower down the market capitalization curve.  He has ploughed more money into smaller companies while cutting stake in larger ones. The average market capitalization of the eight companies in which he raised stake during the June quarter was Rs.98.91 billion. The average market capitalization for the companies in which he cut stake was Rs.312.28 billion.

This comes even as large-caps have outperformed in recent times. The S&P BSE Sensex hit a new high of 37644.59 on Tuesday. The S&P BSE MidCap index is meanwhile down 10.15 per cent, on a year-to-date basis.  The S&P BSE SmallCap index is down 13.76 per cent.

The disclosed value of his portfolio is down 5.1 per cent over the previous quarter. It had fallen another six per cent by March 2018 over December 2017. December is when his portfolio hit its recent peak of Rs.138.25 billion.

Sectorally, he may be in a good place to handle any future market turmoil that emerges.

Consumption stocks account for 53 per cent of his portfolio. Healthcare companies account for another eight per cent.  These companies are generally seen as safe havens during periods of market volatility. Many companies in the consumption space also enjoy the advantage of catering to the domestic market. This would be useful in the event of a worsening global trade situation. Major economies include the United States of America, China and the European nations have all been dealing with increased trade tensions in recent times.

SECTORS

However, he has pared his stake in one his largest consumer-facing bets, watch and jewellery maker Titan Company. His stake is down from 8.46 per cent in March 2018 to 7.06 per cent as of June 2018. It is unclear if this trend will continue in the days ahead.

But for now, the big bull likes little companies.

COMPLETE LIST OF LATEST HOLDINGS

Company Name	Jun 30, 2018	Jun 30, 2018
	Stake %	Value ( Rs Mn)
Titan Company	7.06	55084
Escorts	8.1	8665
Lupin	1.95	7968
CRISIL	5.52	7161
Dewan Hsg. Fin.	2.76	5532
NCC	9.5	5484
Delta Corp	7.5	4337
Rallis India	9.67	3539
Karur Vysya Bank	4.23	3180
Edelweiss.Fin.	1.08	2932
Federal Bank	1.69	2737
Aptech	24.05	2412
TV18 Broadcast	2.6	2347
V I P Inds.	3.69	2225
Multi Comm. Exc.	3.92	1462
Firstsour.Solu.	2.91	1410
Jubilant Life	1.26	1401
Geojit Fin. Ser.	7.58	1331
Agro Tech Foods.	7.09	1144
JP Associates	2.06	804
Ant Raj	3.22	373
Prakash Inds.	1.59	360
ION Exchange	5.46	325
Orient Cement	1.22	273
D B Realty	2.1	209
Mandha Retail	12.74	178
Man Infra	1.21	134
Prozone Intu	2.06	119
Autoline Inds.	8.34	113
Bilcare	8.49	89

Source: Capitaline, Compiled by BS Research Bureau