Last Updated on Jan 17, 2022 by Manonmayi

Mohnish Pabrai is an Indian-American businessman who has gained quite a reputation over the years for value investing and his very popular book – “The Dhandho Investor”. His well-thought-out investments and portfolio helped him successfully build his company in 1999.

Pabrai’s investment strategy was inspired by Warren Buffett‘s model of keeping investment decisions extremely simple. He founded Pabrai Investment Funds, a company that comes under the category of hedge funds exactly on these principles. This investment strategy had reaped rich dividends for Pabrai, creating $ 636.8 mn. in assets.

Here, we will take a look at his current shareholdings and the thrilling journey that led him up until this point.

This article covers:

Investment journey

Pabrai’s father was a serial entrepreneur, and people expected that would help him gain considerable business knowledge. However, dad’s magic seldom rubbed on him, and he was left clueless as to what to do after school. 

Pabrai Jr. then went to Clemson University to study software engineering. Later, he shifted to international marketing as a part of his uncharted career, which earned him the added advantage of learning how business works globally. Pabrai Jr. converted every experience into learning. 

Pabrai launched his IT consulting firm Transtech in 1991, which he eventually sold in 2,000 for a profit of about $ 20 mn. In 1999, he launched his first investment company Pabrai Funds, rather as a hobby, which quickly grew to earn him serious profits and made him a big shot in the world of stock markets.

During the dot com development era, he realized that some non-tech stocks were priced relatively cheap and that some firms offered quite low valuations compared to their sales or prospects. He predicted these companies to have quite a bright future. All of his past experience and this knowledge helped him make smart calls in the stock market world actively.

Shareholdings

Mohnish Pabrai holds about three stocks at present, according to the September 2021 quarter-end reports. He made these investments via Pabrai Investment Fund 3. Ltd, Pabrai Investment Funds IV LP, Pabrai Investment Fund Li and under his own name as well. Below are the details of them:

Edelweiss Financial Services Ltd

Mohnish Pabrai holds about 58,703,028 shares in Edelweiss Financial Services, one of the top companies in the financial services domain, totalling an investment value of nearly Rs. 444.1 cr., making him a 6.3% shareholder in this company. The share, as of 17 January 2021, trades at Rs. 72.05.

Prior to September 2021, Pabrai had divested some of the holdings he had in the company. However, he thereafter bought a 2.8% stake in the company. Currently, Edelweiss happens to be the second-largest stake he has in any company.

Rain Industries Ltd

Rain Industries deals in speciality chemicals and is one of the world’s largest coal tar pitch and petroleum coke producing companies. Pabrai holds about 18,855,170 shares in this company which makes him a 5.6% shareholder here. Rain Industries Ltd is, as of 17 January 2021, trades at Rs. 248.40. The holding value of Pabrai’s stake is Rs. 459.8 cr.

It is interesting to note that Mohnish Pabrai has remained extremely confident in the stock’s performance and increased his holdings from June 2021 quarter to September 2021 quarter.

Sunteck Realty Ltd

Sunteck Realty Ltd is Pabrai’s most significant investment to date. The current market price of the company’s shares as of 17 January 2021, is around Rs. 573.05, and Pabrai holds about 9,781,736 shares here. The value of his investment stands at about Rs. 490.6 cr., which makes him a 6.7% shareholder of this company.

Net worth

Pabrai’s public holding in three companies stands at nearly Rs. 1,380.87 cr as of 2021. He experienced stellar growth in his net worth from March 2016 to September 2018. However, it remained tepid for the next two years. From September 2020 -2021, Pabrai has decreased his holdings from 6 companies to 3. He has completely sold off his stake and exited from companies like Kothe-Patil Developers, Kaveri Seeds Company, and Indian Energy Exchange.

From Mohnish Pabrai's 'The Dhandho Investor': "Try acquiring shares from simple businesses, i.e., where the flow of change is very low." Click To Tweet

The takeaways from Mohnish Pabrai’s book: The Dhandho Investor

Being a huge fan of Warren Buffett’s style of investments, he utilized the knowledge of his inspiration in his field of work. Here are a few things that can be taken as learnings from his hugely popular book  – “The Dhandho Investor”:

  • Make sure to invest in existing established businesses.
  • Try acquiring shares from simple businesses, i.e., where the flow of change is very low.
  • Find shares in companies or industries with durable moats.
  • Buy businesses with a helpful margin of safety.
  • Understand when to sell and by what margin.

Conclusion

Pabrai, over the years, has emerged as a figure people turn to for value investing. His ability to effortlessly select stocks that consistently do well, coupled with his ability to deliver astounding returns to his investors helped him gain quite a formidable reputation. While he has been on a selling spree over the last two years, if Pabrai’s track record is taken into account, he is just gearing up for the next stock out there. That said, it may be prudent to do your own research and also seek advice from your financial advisor before adding or reducing shares from your portfolio.

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