Madhusudan Kela Bets Big on Beaten-Down Smallcaps: Indiabulls and Simplex Infra in Q4

Ace investor Madhusudan Kela has made fresh investments in underperforming stocks, picking up stakes in Indiabulls Limited and Simplex Infrastructures Limited, signaling a contrarian approach amid recent market trends.

Kela acquired over 5.15 crore shares in Indiabulls, representing a 2.22% stake. Indiabulls, a smallcap company with a market capitalization of Rs 2,810 crore, operates across real estate and financial services. The stock ended positively on Friday, surging 11.47% higher to close at Rs 12.15 on the BSE. Despite the sharp uptick, it remains down 18% over the past year and continues to trade below its 200-day moving average, though it has moved above its 50-day average—indicating early signs of recovery.

In a similar move, he bought a 1.21% stake in Simplex Infrastructures. It is a diversified company established in 1924 and delivers projects in several sectors like transport, energy and power, mining, buildings, marine, and real estate. Its stock gained 6.12% to close at Rs 192.35 on the NSE, even as it has declined 36% over the past year, significantly underperforming broader markets like the BSE Sensex and Nifty 50, which have delivered modest returns of 5% and 7%, respectively.

Kela's portfolio boasts of 17 stocks with a net worth exceeding Rs 2,188 crore according to Trendlyne. The latest purchases highlight selective accumulation in beaten-down names. His other bets include Kopran, SG Finserv, Mkventures Capital, Prataap Snacks, Bombay Dyeing, Emkay Global, and Repro. Trendlyne data revealed that Kela's biggest bet is Choice International with a holding value of Rs 1,127 crore. Mkventures Capital and Prataap Snacks are next in line with holding values of Rs 267 crore and Rs 109 crore, respectively.

Kela's strategy of investing in undervalued and underperforming stocks reflects his confidence in the long-term potential of these companies. While the market may be skeptical, his track record and deep understanding of the smallcap segment suggest that these investments could yield significant returns in the future.