How ace investor Vijay Kedia turns smallcaps into multibaggers; Here’s his strategy

Synopsis: Vijay Kedia, the ‘Market Master,’ turns small-cap bets into multi-baggers using his SMILE strategy. His portfolio grew from Rs. 229 crore in March 2020 to Rs. 1,896 crore by December 2024, with iconic investments like Atul Auto delivering over 5,600 percent returns and Cera Sanitaryware multiplying nearly 16,000 times.

Some investors try to make quick money, but a few know how to find small companies that can become big success stories. Vijay Kedia is one of them. He has a special way of picking small-cap stocks that later turn into strong market performers. His steady and patient style has created some of the most impressive stories in the market, but how does he do it?

About Vijay Kedia

Vijay Kedia, often referred to as the ‘Market Master,’ is equally celebrated for his consistent stock market performance and long-term investing acumen. He started investing at the age of 19 and launched Kedia Securities in 1992 at the age of 33. Kedia follows his trademark SMILE approach, focusing on companies that are ‘small in size, medium in experience, large in aspiration, and extra-large in market potential,’ which has helped him build a portfolio admired by investors nationwide.

He emphasizes investing in companies with strong and honest management, stating, “One should scout for companies which have good management. Find very good, very honest management and see the product in which the management is going to outperform its peers and the economy. Invest in those companies for the next 10-15 years, and you cannot go wrong.” 

Vijay Kedia’s Portfolio Analysis

Vijay Kedia’s portfolio has similarly demonstrated impressive growth with intermittent corrections. It started at Rs. 229 crore in March 2020, climbing to Rs. 659.1 crore by September 2021 and Rs. 1,475.6 crore by December 2023. However, market volatility led to a decline to Rs. 1,242.7 crore in March 2024, before rising again to Rs. 1,837.1 crore in June 2024 and Rs. 1,896.3 crore by December 2024. As of December 2025, Kedia’s portfolio has adjusted to Rs. 1,215.4 crore, reflecting the impact of geopolitical issues and market fluctuations.

Kedia’s Top holdings include  Atul Auto at Rs. 257.1 crore across 58 lakh shares and a 20.9 percent stake, Neuland Laboratories valued at Rs. 219.5 crore with 1.3 lakh shares and a 1 percent stake, Elecon Engineering at Rs. 106.8 crore with 22.5 lakh shares and a 1 percent stake, Tac Infosec valued at Rs. 100 crore with 13.86 lakh shares and 13.2 percent stake, and Sudarshan Chemical at Rs. 99.3 crore with 10 lakh shares representing 1.3 percent ownership.

The Philosophy Behind His Investing – SMILE Strategy

At the heart of Kedia’s investing approach is his SMILE philosophy. Rather than pursuing the largest or most high-profile companies, he focuses on smaller businesses led by credible, capable promoters with a clear vision for scale. When such leadership aligns with industries offering significant long-term headroom, it creates the kind of opportunity Kedia is drawn to. Over time, this disciplined framework has become a defining feature of his closely watched portfolio.

Small In Size 

Kedia begins his search in the small-cap universe, where companies often operate under the radar and remain overlooked by large institutions. He believes these smaller enterprises offer a unique advantage: they can scale rapidly if the fundamentals fall into place. His focus is not merely on size but on the scalability of the business model, whether the company can grow efficiently as demand rises. For Kedia, the integrity and competence of the promoters become non-negotiable here, because strong leadership is often the deciding factor between a small company that fizzles out and one that evolves into a sector leader.

Medium In Experience 

Experience is an important part of Kedia’s approach, but he looks for a middle ground, not founders who are completely new, and not those who have grown too comfortable. He prefers management teams that have lived through at least one full business cycle. Surviving tough times teaches promoters how to make better decisions and run their companies with more discipline. These leaders usually handle volatility sensibly and stay focused on long-term execution. When Kedia finds this mix of experience and stability, he is comfortable holding the stock for many years, letting compounding gradually create value.

Large In Aspiration

Kedia also looks closely at how ambitious the promoters are. He prefers leaders who want to grow the business, not just keep things as they are. This could mean entering new markets, launching new products, or using technology to strengthen operations. When management has a clear plan for expansion, it gives Kedia the confidence to stay invested for the long term. For him, ambition is just as important as execution, both need to work together for a company to become a multibagger.

Extra Large Market Potential 

The last part of the SMILE framework is the size of the market opportunity. Strong management alone cannot create wealth if the industry has limited room to grow. That’s why Kedia looks for sectors with long-term potential and that are still developing, expanding, or benefiting from major economic changes in India. When a capable company operates in a high-growth space, its chances of scaling multiply. This combination of good leadership and a large market opportunity is what long-term investors, including Kedia, depend on to build wealth over a decade or more.

SMILE Strategy In Action

A look at Kedia’s past investments shows how effectively his SMILE framework works in practice. His early entries into overlooked companies illustrate the power of patience, promoter quality, and market potential.

Atul Auto

One of Kedia’s earliest and most iconic investments was in Atul Auto, a small three-wheeler manufacturer from Gujarat. He began accumulating the stock at about Rs. 5 when the company’s market capitalization was barely Rs. 50 crore in the early 2000s. Over the next two decades, the stock delivered extraordinary returns, rising more than 5,600-5,700 percent and turning into a 160x opportunity. This long-term compounding translated into an impressive annualised return of roughly 57 percent over the period.

Cera Sanitaryware

Kedia spotted Cera Sanitaryware back in the mid-1980s when the company was still under the radar and operating on very thin margins. He bought into the business early and remained invested for more than 16 years. As India’s housing demand surged and the middle class expanded, Cera became one of the biggest wealth-creating stories in his portfolio, multiplying nearly 16,000 times by 2017. He exited the holdings in the quarter ending December 2021. 

Aegis Logistics

Around 2004-2005, Kedia came across Aegis Logistics, then trading near Rs. 20 per share. Confident in the company’s niche and growth prospects, he allocated nearly 5 percent of his capital to it, a bold move at the time. The bet paid off handsomely: within two years, the stock grew almost 15 times, underscoring his ability to act decisively when conviction is high. He exited the stock in the quarter ending December 2005. 

Sudarshan Chemical

Sudarshan Chemical is another example of Kedia identifying potential long before the broader market noticed it. His early entry and willingness to hold through multiple market cycles resulted in substantial wealth creation. By mid-2025, the value of his stake had grown to roughly Rs. 100 crore in his investment vehicle, Vijay Kedia Investments, reflecting years of disciplined compounding.

Kedia’s success across these companies highlights a consistent pattern of patience, belief in capable management, and the willingness to stay invested through dull years. He held on to Atul Auto even during long periods of stagnation, and once the company crossed key utilisation thresholds, the stock surged nearly 40 times in just three years. 

His investments in Cera Sanitaryware and Sudarshan Chemical also benefited from powerful industry tailwinds and multi-decade compounding, demonstrating how his SMILE framework, when applied with conviction, can transform small companies into long-term wealth creators.

Conclusion

Vijay Kedia’s journey shows that big wealth in the stock market is often built quietly, patiently, and with strong conviction. His SMILE strategy proves that small companies with honest management, clear ambition, and a large market to grow into can become powerful wealth creators over time. Whether it was Atul Auto, Cera Sanitaryware, or Sudarshan Chemical, his investments highlight one simple truth: long-term thinking works. For investors trying to understand how small-caps turn into market stars, Kedia’s approach offers a clear and inspiring roadmap.

Written by Manan Gangwar

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