Amitabh Singhi on How to Invest in India

We recently had the pleasure of interviewing Amitabh Singhi, who has been investing in Indian companies for almost ten years as the managing director of Surefin, an India-based investment firm. Since inception in mid-2001, the Surefin fund has returned 27.9% annualized, net of fees. Amitabh is also a director of Amrit Capital, a U.S. and Mauritius-based hedge fund focused on Indian equities. Previously, Amitabh worked in technology investment banking at Credit Suisse First Boston and in equity sales and trading at Goldman Sachs. Amitabh graduated with a bachelor of science degree in economics from the Wharton School at the University of Pennsylvania. He is an advisory board member of The Dakshana Foundation, a charitable organization founded by Mohnish Pabrai, focused on funding educational opportunities for exceptionally gifted children from impoverished rural backgrounds in India.

MOI Global: Tell us about yourself and Surefin. What was the genesis of the firm, and what operating principles have you followed since inception?

Amitabh Singhi: I read Security Analysis for the first time in junior year in college (sometime in 1999-2000). Mr. Buffett came to my college campus soon after and I was amazed by his life story. So when I returned to India (this was when the Indian markets had crashed heavily; especially the tech stocks) after a one-year stint working as an investment banking analyst in New York, I approached friends and family whose portfolios had seen up to 90% erosion in value. Armed with my Security Analysis knowledge, I offered to help them cut their losses and in turn take over their portfolios. That’s how I stumbled into being a fund manager. India was unbelievably cheap back then.

For the first few years I mostly read and re-read Security Analysis (and Fisher’s Common Stocks and Uncommon Profits and Klarman’s Margin of Safety and the other usual suspects) and worked on pattern recognition. It was possible to find companies selling at or below net cash with a strong business trading at 3x adjusted earnings! We bought many net nets and very cheap companies that were completely ignored by the serious investors. We were lucky that India was on no one’s radar then.

In the ten years since we started investing in India we have stuck to the basic principles of conservative investing. Our mindset has been to avoid bankruptcy. Our job is becoming easier as Indian businesses mature and the institutional and regulatory frameworks improve. Our website at www.surefin.com contains information regarding the fund’s philosophy and performance.

MOI: Help us understand the kind of investor you are, perhaps by highlighting a couple of examples of companies you have invested in or decided to pass up. What are the key criteria you employ when making an investment decision?

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