India’s Best Fund Managers 2021

Assume nothing, question everything

DSP MF’s Rohit Singhania believes in shorter horizons and open-mindedness for investing success 

Many investors buy a stock with a five- to ten-year horizon. For Rohit Singhania, fund manager at DSP MF, this does not work. “You can estimate but can’t be sure of what will happen in five years,” he says. Therefore, when he buys into a company, he does it with a one-two year horizon and he keeps questioning the investment basis continuously. He believes in keeping a close watch on his portfolio and correcting course at the earliest.

This dynamism and open-mindedness also extend to how he judges a company’s management. Of course, he leaves no room for laxity in governance, but he also does not shut out a company because its management may have made a suboptimal decision in the past. “The situation might be completely different today, and that can present opportunities. Saying things like ‘the management has done this in the past, so I will never look at this company again’ may not be the optimal approach,” says Singhania.

It is only right that he values his receptiveness. It is a quality that landed him a profession that he is passionate about. No one in his family had been working in finance, but young Singhania overheard his friends and classmates discussing investing when he was in school. It piqued his curiosity, and made him wonder about the mechanics of investing. That’s how, as a teenager, he began reading about stocks and deals. He went on to pursue B.Com in 1998 and then MMS (Finance) in 2002.

Sell-side wisdom
Singhania started his career as a research analyst at IL&FS Securities and HDFC Securities, where he tracked sectors such as metals, cement, sugar and tea. During those initial years, he observed company managements closely and learnt that a management’s outlook is not cast in stone. He says working on the sell-side helped him develop his investing style in more ways than one.

“It’s a lot of hard work,” he says, “nothing is served on a platter. Before you pitch to a fund manager or a buy-side analyst, you need to do detailed work on the stock. For example, I was tracking the metals space, which had six to seven listed-companies. So, I needed to reason how I categorised them or ranked them, and how I formed any thesis. All of this shaped the way I think.” He takes nothing for granted and double-checks every premise.

He began working as a fund manager at DSP in 2010 and started by overseeing the DSP India T.I.G.E.R Fund, which now has an AUM of Rs.9.65 billion and includes stocks such as Supreme Industries, Siemens, ACC and L&T. This is an infrastructure and economic-reform driven fund, so it buys into sectors such as manufacturing, cement, metal, oil and gas. “In this we look at gross, fixed capital formation in the country and see which companies can benefit from it,” he says. Two years later, he was given charge of the Natural Resource Fund, with an AUM of Rs.4.73 billion. It also invests in cyclical stocks, but it has a smaller subset compared to the T.I.G.E.R Fund.