Day: November 29, 2012

In an earlier post, I had written about the hypocrisy of Adi Godrej wherein Adi had told that farmers should give up their land for compensation which should then be invested in mutual funds.

Well, funnily enough,Adi Godrej does not invest in mutual funds himself.In an interview to Outlook Business, he mentions:

“By and large we don’t invest outside of our group, except for a couple of family members who may have bought shares in some other companies. We have never relied on professional wealth managers for advice and we know that the best investment for us is our own group.”Godrej invests in jewellery and homes for personal use. But that apart, he’s not a big fan of either bullion or real estate, perhaps because the group itself owns vast tracts of land (3,500 acres) at Vikhroli in suburban Mumbai and also has a realty development arm. “While equities in the short-term may not have delivered, over the long-term they definitely have outperformed other asset classes, including real estate,” says Godrej. He explains with an example. In 1963, Godrej paid Rs 1 lakh to buy his first house, a 2,916-sq ft apartment at Usha Kiran, Carmichael Road, in tony South Mumbai; early last year, he sold it for Rs 25 crore. “On the face of it, it looks like a stupendous gain but the fact is, the appreciation is just around 20% CAGR,” he points out. “Now, after we demerged Godrej Consumer from Godrej Industries in 2001, in just 11 years, the CAGR in the share prices of Godrej Consumer and Godrej Industries has been upwards of 40% and 50%.”

 

So should farmers now give up their land and buy Godrej group stocks?