Helios to turn stock market ‘slumdogs’ into millionaires

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: There’s another slumdog story in the making and it’s happening in the Indian markets. Helios Capital Management Pte, the hedge-fund manager once backed by Tudor Investment Corp, is scouting for underperformers in the Indian economy to catapult them to millionaire status.

The plan is to start a ‘Slumdog Millionaire’ fund that will buy underperforming shares of Indian companies.

“We want to find slumdogs from the Indian equity markets who have the potential of becoming millionaires,” Samir Arora, founder of Singapore-based Helios Capital, said in an interview.

The firm plans to raise about $50 million by the end of July for its Helios India Jai Ho Fund, Arora said.

Ironically, it's no slumdog story that inspired the fund, but the Sensex's recent remarkable performance.

Partially reversing last year's rout, the Sensitive Index has already jumped 54 % this year, making it the world's sixth-best performer.

The index surged a record 17% on May 18 as investors bet the ruling Congress party's biggest election victory in two decades will enable it to ease foreign investment rules and sell state assets – policies stalled by the UPA's communist partners in its previous term.

Even after the rally, there remain "some stocks that are worth picking", said Munesh Khanna, managing director of investment banking at Centrum Capital Ltd, in Mumbai.

"There are still a lot of companies in the mid-cap sector in the second and third tier that have been beaten up, but have a lot of potential," he said.

The Jai Ho fund plans to start by investing in stocks that have fallen at least 50% since the end of 2007, which marked the end of India's five-year bull run, said Arora, who has been investing in Indian equities since 1993.

These include Tata Motors Ltd and DLF Ltd.

“There are many companies that have survived the past 18 months with dignity and we want to focus on them,” said Arora, adding, “The idea is to buy stocks in companies that do not have life-threatening debt, are sure-shot survivors and have become cheap on some appropriate parameters.”