Nalanda Capital, a Singapore-based investment fund, has carved a niche for itself as one of India's most influential equity investors, managing assets worth ₹50,000 crore. With a focused portfolio of just 39 stocks since its inception in 2007, the fund's market-beating returns have garnered attention. Led by founder Pulak Prasad, often compared to Warren Buffett for his long-term investment strategy, Nalanda has built a reputation for being a "permanent owner" of companies. Despite the recent highs in the Indian stock market, Nalanda has been strategically selling off significant holdings, continuing to demonstrate its disciplined investment philosophy.

Nalanda Capital: A Major Player in Indian Equity Markets

Significant Influence with a Focused Portfolio: Nalanda Capital is not your average investment fund. With ₹50,000 crore under management, it is one of India’s largest equity investors. The fund has maintained a highly selective portfolio, investing in only 39 stocks, including well-known names like Info Edge, Page Industries, and Havells. This focused approach has yielded substantial returns, making Nalanda a sought-after name in the investment community.

Pulak Prasad: The Man Behind the Success: The driving force behind Nalanda Capital is Pulak Prasad, a former private equity executive whose investment philosophy has drawn comparisons to that of Warren Buffett. Prasad’s strategy of being a "permanent owner" of the companies he invests in has resonated with many in the industry, solidifying his reputation as a prudent and successful investor.

Nalanda’s Strategic Exits: A Tactical Approach

Selling High in a Bullish Market: Despite the euphoria surrounding the Indian stock market's recent highs, Nalanda Capital has been quietly offloading some of its key holdings. In mid-June 2024, the fund sold nearly a fifth of its stake in Thermax, a capital goods company, reaping a sevenfold return in just four years. This move underscores Nalanda’s tactical approach to profit-taking even in a bullish market.

Regulatory Spotlight and Market Leadership

Standing Out Amongst Global Players: Nalanda Capital’s prominence is further highlighted by its inclusion as the only private equity firm or boutique fund manager in the list of foreign portfolio investors with over ₹25,000 crore of assets under management in Indian stocks. This distinction, noted when SEBI introduced new disclosure norms for foreign investors, reflects the fund’s significant presence and influence in the Indian equity market.

Impressive Long-Term Performance

Market-Beating Returns: Nalanda Capital’s first fund, launched in 2007, has delivered an annualized return of over 20% over 15 years, outperforming both the Sensex and the midcap index by approximately 11 percentage points. This consistent outperformance is a testament to the fund’s disciplined investment strategy and Prasad’s leadership.

Recent Strategic Divestments

June 2024: Thermax Ltd. Exit: In a notable move, Nalanda Capital divested a 1.2% stake in Thermax Ltd., an energy and environment solutions provider, for ₹765 crore through open market transactions. The sale of 15 lakh shares at ₹5,100.26 each illustrates the fund’s strategy of capitalizing on high valuations.

May 2024: Great Eastern Shipping Co. Ltd. Divestment: Earlier in May 2024, Nalanda Capital, through its affiliate Nalanda India Equity Fund Ltd., sold a 1.4% stake in Great Eastern Shipping Co. Ltd. The sale of 20 lakh shares at an average price of ₹950.25 per share brought in ₹190.05 crore, further demonstrating Nalanda’s tactical approach to portfolio management.