Vijay Kedia’s Strategic Real Estate Investments: Balancing Stocks and Passive Income
Vijay Kedia, a renowned investor in small- and mid-cap stocks, shares his strategy of diversifying his portfolio with a small portion allocated to real estate. This approach allows him to generate passive income and maintain financial stability, even during market downturns.
Real EstateStock MarketInvestment StrategyPortfolio ManagementMidcap StocksReal EstateJun 15, 2025
In his recent interaction with Mint for the Guru Portfolio series, Kedia elaborated on his investment strategy across different asset classes and his bullish outlook on sectors like tourism and hospitality. Here’s a closer look at his asset allocation and investment philosophy.
What’s Your Asset Allocation Split?
Kedia’s portfolio is meticulously balanced with around 6% in gold and silver, 10% in real estate, 11% in cash, and the remaining 73% in equities. Within the equity segment, he has shifted 20% of his investments into more liquid stocks, which are not necessarily large-cap but offer better liquidity. These investments are typically found at attractive valuations and provide decent liquidity. If he identifies attractive opportunities in illiquid small- and mid-cap stocks, he is prepared to reallocate this capital. Currently, 80% of his equity portfolio remains in mid- and small-cap stocks. His gold exposure is through Sovereign Gold Bonds, and his silver exposure is through silver exchange-traded funds (ETFs).
How Has Your Portfolio Performed?
Over the past year, Kedia’s portfolio has experienced a 30% decline. However, over the last five years, it has grown by 3-4 times. This performance underscores the volatility and potential of the market, especially in the small- and mid-cap segments.
Is There Froth in the Mid- and Small-Cap Space?
Kedia acknowledges that the mid- and small-cap universe is vast, with both frothy stocks and undervalued gems. While some sectors and stocks are overvalued, others remain attractive. He emphasizes the importance of careful selection and a long-term perspective.
How Has Your Experience Been Investing in International Stocks?
Kedia has made small investments in two US stocks over the past three years but has not significantly increased his holdings. Additionally, he has invested in a Chinese ETF listed on Indian stock exchanges. Initially, the ETF performed well, rising by about 30% within six months of his purchase. However, it has since declined by nearly 10% from its peak, though it remains up 15-20%. Kedia is committed to a long-term holding period of four to five years or more, despite the geopolitical risks associated with US-China tensions.
What’s Your View on Tariff-Related Feuds Between China and the US?
Kedia believes that the tariff-related tensions will eventually settle down. Both the US and China will likely find common ground as they recognize the mutual benefits of a stable economic relationship. While the situation is uncertain, he remains optimistic about the long-term prospects.
Have You Added to Your Real Estate Portfolio?
In the past year, Kedia has expanded his real estate portfolio by purchasing two warehouses. He typically reallocates funds from stocks to real estate during bull markets to create a steady stream of passive income. This strategy ensures financial stability and allows him to continue investing in stocks, even during market downturns. His real estate portfolio is predominantly commercial, with 80% in commercial properties and 20% in residential.
What’s Your View on Silver?
Kedia expects silver to outperform gold in the coming years. However, he does not actively seek to increase his exposure to precious metals, preferring to focus on equities.
Why Have You Kept Some Cash in Your Portfolio?
Kedia maintains about 11% of his portfolio in cash, which he is prepared to deploy when attractive investment opportunities arise. Despite selling some shares in the last three to four months, he has not found suitable investments at current valuations, leading him to keep the funds in a bank.
Do You Have Any Health Cover?
Kedia has a medical cover of ₹40 lakh, ensuring he is well-protected against potential health-related expenses.
What’s Your View on the Indian Stock Market Going Forward?
Kedia is optimistic about the Indian stock market, believing that the bear phase is over. While the indices have recovered strongly, his focus remains on individual companies rather than the broader market. He anticipates a mixed performance, with some stocks reaching new highs while others may lag.
Are There Any Particular Sectors You’re Bullish On?
Kedia is particularly bullish on the tourism sector, especially with the government’s emphasis on boosting domestic tourism. Airlines and hotels are likely to benefit from this trend. He also sees potential in hospitals, given the increased health awareness post-Covid. Additionally, he believes the EV and power sectors hold promise, although they are still in the early stages.
What’s Your Stock Selection Process?
Kedia follows a bottom-up approach, focusing on individual companies before considering the broader sector. He looks for strong companies that can capture market share, even in challenging conditions. While he currently invests in value-oriented companies with moderate growth, he is open to switching to growth stocks as opportunities arise.
What is a Good Hunting Ground to Find Stocks?
Kedia believes that the best stock ideas often come from everyday life. Observing trends and changes in your surroundings can provide valuable insights. For instance, his investment in an airline company was inspired by the increasing crowds at airports, and his investment in telecom was driven by the surge in data consumption.
Once You Have Identified a Stock, How Do You Decide How Much to Invest?
Kedia emphasizes the importance of investing an amount that allows you to sleep peacefully at night. Over-investing in any stock can lead to anxiety during market downturns. For new investors, he suggests keeping a portfolio of no more than 20 stocks for better tracking and management.
What Percentage of Your Equity Portfolio is in Your Top Five Stocks?
Approximately 50% of Kedia’s equity portfolio is concentrated in his top five stocks, highlighting his belief in the power of a few key investments to drive wealth creation.
What’s Your Advice to Investors Who Want to Take Up Direct Stock Investing?
Kedia advises new investors to start with mutual funds, particularly through systematic investment plans (SIPs). This disciplined approach can compound wealth over the long term. Direct stock investing requires a steep learning curve and is not suitable for everyone. However, for those who are willing to take the risk, he emphasizes the importance of viewing volatility as a learning opportunity.
Frequently Asked Questions
What percentage of Vijay Kedia’s portfolio is allocated to real estate?
Vijay Kedia allocates around 10% of his portfolio to real estate.
How does Vijay Kedia use his real estate investments?
Kedia uses his real estate investments to generate passive income through rentals, which helps him maintain financial stability and continue investing in stocks.
What is Kedia’s outlook on the Indian stock market?
Kedia is optimistic about the Indian stock market, believing that the bear phase is over and that the market will continue to recover, though it may be a mixed bag with some stocks outperforming and others lagging.
Which sectors is Kedia bullish on?
Kedia is particularly bullish on the tourism sector, especially with the government’s focus on boosting domestic tourism. He also sees potential in hospitals, EV, and power sectors.
What is Kedia’s advice to new investors in direct stock investing?
Kedia advises new investors to start with mutual funds, particularly through systematic investment plans (SIPs). Direct stock investing requires a steep learning curve and is not suitable for everyone.
Related News Articles
Piramal Capital and Housing Finance Receives Ba3 Rating from Moody's, Outlook Stable
Moody's assigns Ba3 rating to Piramal Capital and Housing Finance, citing its diversified portfolio mix and high capitalization, offset by relatively low profitability and legacy real estate exposures.
Why NRIs Favour Investing in Indian Real Estate Market
For years, real estate has been a popular investment option for Non-Resident Indians (NRIs) due to its potential for long-term appreciation and rental income.
CRC Group to Invest ₹525 Crore in Ultra-Luxury Housing Project in Greater Noida
Noida-based CRC Group has announced a significant investment of ₹525 crore to develop an ultra-luxury residential project called CRC Maesta in Greater Noida. The project, spread across 4 acres, will feature 358 premium apartments and is set to be a landma
Who Is Driving the Sky-High Property Prices in Hyderabad?
A Reddit post highlighting the astronomical property prices in Hyderabad has sparked a lively debate among netizens. Many are questioning who can afford these sky-high prices, with NRIs and wealthy individuals being named as potential buyers.
HoABL Infraworld Acquires American Center in Mumbai for Rs 56 Crore
Realty firm HoABL Infraworld has acquired the historic American Center building in Mumbai for Rs 56 crore. The property, which was part of the US Consulate General, has been purchased from the US Secretary of State.
Magicbricks Acquires Majority Stake in PropViz to Enhance Developer Tech Solutions
The real estate classifieds portal, Magicbricks, has taken a significant step forward by acquiring a majority stake in PropViz, a leading provider of 3D visualization and immersive technology solutions. This strategic move aims to offer advanced tech solu