Outside of his business, Rajendra Majithia is clearly in love with equities, but prefers to take the proxy route to investing. “I am extremely uncomfortable with the fluctuation in the stock market,” he says. As director of the closely held Rs.2,000-crore Ahmedabad-based
Urmin group, Majithia prefers investing in mutual funds, where he has parked nearly one-third of his wealth. “Investing directly in stocks calls for a lot of research and it is a full-time job. Also, my own belief is that making a lot of money in the market makes you lazy,” says the 51 year old.
Urmin has a diversified presence across food & beverages, hospitality and healthcare. “I like the idea of creating a business and, hence, a majority of my wealth is tied in the group businesses,” explains the father of two. While 60% of his wealth is tied in the business, the rest is evenly split between property and mutual funds. “I like land as an asset class and have been buying it for years. A small proportion (10%) of my real estate exposure comprises commercial property,” he says. In terms of return, mutual funds have done well at 15-20%. Though land value appreciates 10% each year, Majithia, who has bought parcels in and around Ahmedabad, is looking at a 20-year horizon. But more than just return, Majithia wants to build businesses on this hard asset. “It gives you the flexibility to build hotels or even commercial complexes. That is not the case with other investments.”
Though Majithia believes equities can easily yield him anything upwards of 30%, he prefers to play it safe. “I have also invested in government bonds and FDs more than a decade back,” he says. But very clearly given that his own business is doing well, Majithia is not looking for further diversification. “I prefer to invest in what I understand and there is no asset class better than my own venture,” says Majithia with a grin.