Why Raamdeo Agrawal is betting on Asian Paints

The beauty of buying a bruised blue chip is that the downside is limited, while the upside is unlimited Raamdeo Agrawal Chairman & cofounder, Motilal Oswal

- Satish John & Dipti Sharma

There is one company that market veteran Raamdeo Agrawal sorely misses not investing in at the right time: Asian Paints Ltd. "It is really iconic. I missed it three times. I am watching it from the 1980s and I have still not made a single penny out of it. But this time, I think I am going to make money."

Agrawal is banking on the "bruised blue chips" theory—or investing in quality, large companies when they go through a lean patch. "Nothing comes to my mind which is that bruised a blue chip besides Asian Paints," he said, referring to a near 30% year-to-date decline in the shares of Asian Paints as consumption growth eased.

The chairman and cofounder of Motilal Oswal Financial Services sat down with Mint at his office in Mumbai's Prabhadevi to discuss the 2024 wealth-creation study.

Citing how his earlier strategy differed from that of his late friend Rakesh Jhunjhunwala's, he said, "I always wanted to buy blue chips in good shape, so I used to pay full price."

But the beauty of buying a bruised blue chip is that the downside is limited, while the upside is unlimited, he said. It all depends on a bit of luck and brilliance in choosing the right stock, Agrawal said.

Edited excerpts:

When most market mavens are touting blue chips as a safety net, your wealth creation report is titled, 'Creating Wealth Through Bruised Blue Chips'. What is your key to profiting from these blue chips?