Stock market veteran and one of India’s original value investors, Parag Parikh, died in a car crash in the US on Sunday.
Parikh, 61, was among the first professionals — he was a chartered accountant by training — to enter the broking business and was known for his practical approach to stock market investing and contrarian views, which saw him studiously avoid technology stocks during the dotcom boom, and also one of the few to stand up for Indian brokers in their fight against foreign institutional investors.
Traders who knew him for more than three decades say that his strong conviction was what set him apart from the rest in the broking community, as he was never shy of taking a different stand on an investment idea if he was convinced of its strength.
“He was one of the few who had imbibed value investing from Warren Buffett and oriented it to suit the Indian market,” said Shankar Sharma, vice-chairman of First Global. “We were novices when we started in the mid eighties and looked up to him as he was already an icon by then. I remember his conviction in investing in strong companies with a direct consumer connect — the Nestles, Castrols and ITCs of the world — which were expensive then. But he was convinced of their long- term values.”
Parikh started his broking business in 1979 as a sub-broker.
He, however, found it extremely difficult to break independently into the then small club of brokers on Dalal Street who very close knit and did not encourage outsiders.
The break came in 1991 when economic reforms liberalised norms in the stock market, which were then thrown open to foreign investors. In 10 years, his broking and wealth management businesses were flourishing, but he didn’t hesitate to give it up and start an asset management company (AMC) in 2013 to offer MFs as an option for small investors.
“It’s a big shock to the community. He was a man of tremendous conviction in value investing,” said Motilal Oswal, co-founder of Motilal Oswal Financial Services.
In 1994, Parikh, who was one of the many Indian brokers representing international broking firm Jardine Fleming in India, walked out of their lucrative contract in protest after the foreign firm displayed little trust in Indian market intermediaries.
Parikh’s AMC, Parag Parikh Financial Advisory Services (PPFAS), was India’s youngest fund house, which focused on value investing, a trait made popular by legendary investor Warren Buffett. PPFAS was notable in that it had only one scheme – PPFAS Long Term Value Fund.
“He brought good practices into broking and wealth management business. He extended this when he started the AMC business. These are all part of the financial services business,” said Anand Rathi, another long-time associate and past president of the BSE.