Madhusudan Kela earned a formidable reputation as a stock-picker and built Reliance into India’s biggest mutual fund. And then he had a rethink.

Why Madhu Kela moved out of Reliance MF?


On a warm Delhi evening in 2006, star fund manager Madhusudan kela and his trusted lieutenant Sunil Singhania were at a dinner with the promoter of food processing company REI Agro. The firebrand duo from Reliance Mutual Fund was considering an investment in the up and coming firm. The company had also arranged their visit to the factory the following morning. But as the dinner progressed and the chat kept coming back to REI Agro’s future plans, Kela became more and more excited. He asked the promoter if they could visit the plant immediately after dinner instead of the next day. Taken aback, the entrepreneur nevertheless said yes. So it was around midnight that Reliance Mutual Fund decided to make one of its most daring bets.

Passionate. Impatient. Instinctive. Crafty. These are some of the adjectives that the mutual fund industry knows Madhu Kela by. He is the man who built the equity funds of Reliance MF from Rs. 13 crore in 2001 to a record-breaking Rs. 40,000 crore in 2010, helping the fund house become India’s largest in the process.

For awestruck rivals and happy investors, he was the Enduring Atlas, the titan who held up the heavens for all. A man who had the nose for multibaggers much before anybody else did.

Like the time when he had a chat with a Kingfisher airhostess on a flight from Delhi to Mumbai. That led him to do more research on the sector, and he decided to invest in SpiceJet. Or when he took a close look at Adani Enterprises in 2006 when it was just a trading firm and bet on its future. Or even the investment he made in Jindal Steel & Power in 2003 and saw its market capitalisation zoom by 40 times within six years.
Over time, Madhu Kela became the embodiment of smart stock picking and hundreds of thousands of investors trusted him with their money. He became the icon of ‘bottoms-up’ investing, picking scalable long-term opportunities with the help of rigorous balance sheet scrutiny and intense research of corporate plans. Under his watch, Reliance MF beat ICICI Prudential in a neck-and-neck race to the top spot in asset size.