Here's why realty finds a place in Kedia's small-cap-heavy portfolio

Despite a 30% dip, small- and mid-cap stocks still make up for a bulk of the veteran investor's equity portfolio

- Jash Kriplani

Vijay Kedia, known for spotting multibaggers in the small- and mid-cap space, keeps a small portion of his portfolio in real estate to create passive income through rentals. It allows the Kedia Securities founder, also the largest shareholder in several listed Indian companies, to freely invest and hold his stock positions.

In his interaction with Mint for the Guru Portfolio series, Kedia shares his investment approach across different asset classes, apart from equities, and why he is bullish on sectors like tourism and hospitality. Edited excerpts:

What's your asset allocation?

Around 6% is in gold and silver, around 10% in real estate, 11% in cash, and the balance 73% is in equities.

Within equities, I have moved 20% of my investments into more liquid stocks. These are not necessarily large-cap stocks, but just stocks with more liquidity. I had sold some old holdings and found these stocks at attractive valuations, with decent liquidity. If I find attractive opportunities in illiquid small- and mid-cap, I will move this money there. I love illiquid shares because they force me to hold shares in bad market sentiment.

A large part of my equity portfolio, 80%, still remains in mid- and small-cap stocks. The gold exposure is through Sovereign Gold Bonds, and the silver exposure is through silver exchange-traded funds (ETFs).

How has your portfolio fared?

In the last one year, it is down 30%. Over the last five years, it is up 3-4x.

Is there froth in the mid- and small-cap space?

The mid- and small-cap space is a large universe of stocks. There is froth in some of those names. There is also value. Some stocks, some sectors are still very cheap. So, it's mixed.

How has your experience been investing in international stocks?