We see ourselves as India specialists. The strategy is to build a portfolio of 15-20 stocks backed by deep research, to be held for atleast 3-5 years. The core of our philosophy is “to own good businesses that are run by great managements and are available at reasonable valuations.”
Under the RIA model, for our Day 1 client we delivered a CAGR of 27.1% over the 7 year period ended March 2025, generating an alpha of 13% over the BSE SmallCap Index. Annualized portfolio churn over this period stood at 34.2%.
We currently run only one strategy - Samatva Small Cap Strategy, focused on companies sub Rs 10,000 Crs in market capitalization. We invest in cash equities with a buy-and-hold approach & do not speculate in F&O/other segments.
The founder’s and the team’s capital would also be invested alongside the client’s portfolio to ensure complete alignment of interests. We firmly believe in adhering to the highest standards of integrity and corporate governance.
Inherently bad businesses in a difficult/structurally challenged industry that make look cheap on financial metrics, would not make it to the portfolio. More often than not, businesses that trade at low valuations do so for a reason. Historically bad businesses that have structural changes/tailwinds can be very interesting opportunities, but again these instances are few and far between
In times of market irrationality that results in individual stocks being overvalued, we believe having cash makes complete sense. This will not be a ‘cash call’ based on our perception of the market being ‘over-valued’ or ‘under-valued’ on the whole, it would more be on individual securities that we like, not being available at a price that we desire. We would not be taking ‘cash calls’ on the market in general, nor will there be a minimal portion compulsorily invested.
At Samatva risk is clearly viewed as ‘permanent loss of capital’, and not ‘volatility’ that is captured in the more popular measure of risks such as Sharpe ratio etc. In our approach we intend to embrace volatility and invest with a 3-5 year view. This is also one of the reasons why we believe quality of our investor base (patient capital, recognizing that equities as an asset class can be volatile and that returns can be back-ended) is extremely critical.
There are many ways to invest in the equity markets. At Samatva our chosen way is through long-term investing in Indian public listed, small cap equities. Accordingly, Samatva portfolio is suitable only for the patient investor (has a time horizon of atleast 5 years) and who can withstand volatility. It is for this precise reason Samatva does not intend to raise money through third party distributors. We want all our clients to exactly understand what they are signing up for and we are happy to engage in detailed, honest discussions before signing up.
For someone looking at quick returns, trading activity across various asset classes, or for a low volatility portfolio, Samatva would not be your ideal choice.
In India, long term capital gains are taxed at 12.5%+Surcharge+Cess while the short term capital gains are taxed at 20%+surcharge+cess. A stock sold after holding for greater than 12 months would attract long-term capital gains, while a stock sold with a less than 12 months holding period would attract short term capital gains.
The portfolio holdings would be available through the client login on our website. At the end of every 6 months we intend to write an investment letter to all our investors outlining the key activities during the period, apart from giving our views on the key relevant trends. These letters are primarily to keep clients of Samatva abreast of the portfolio activity apart from giving us an opportunity to discuss our thoughts on investing. Apart from this periodic communication, if there are any specific queries occasionally, we would be happy to discuss.