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In 1980, a 19-year-old boy borrows ₹25,000 from his relative. Puts it in the stock market. The first 12 years were just losses. So much loss that he had to mortgage his mother's jewellery. Today that person's net worth is more than ₹1500 crores. This is the story of Vijay Kedia. One of the most admired retail investors in India.
And today I will tell you his exact framework which is Smile Strategy, through which he has repeatedly picked multibaggers when no one was even watching. Vijay Kedia ji started investing with ₹25,000. For the first 12 years, I had to mortgage my mother's jewellery. But he learned and shifted to long term investing.
Buy Atul Auto at ₹5 a share. Hold up to ₹800. This gave him ₹10 times return. Similarly, I purchased Cera sanitary ware for ₹30 and held it till ₹4800 which gave a return of approximately ₹10 times. He picked both the companies at a time when no one was even asking. In March 2020, his portfolio size was Rs 229 crore.
Which increased to ₹1896 crore in December 2024. This is his portfolio growth of 8X in just 4 years. He has around 16 companies in his portfolio in 2026. Whose value is ₹184 crores. This return comes from a specific repeatable framework, not from a lock. The name of that framework is Smile. Vijay Kedia ji's secret formula Smile Just five letters but his entire investment strategy is hidden in it S Small in size: A company smaller than Rs 1000 crore where big funds have not yet come in but when they come in, the stock has already given 5 to 10X reward M Medium in experience: Neither very new nor very old: A proven company of 5 to 15 years which is about to scale I Integrity of management Kedia says look for honest and ambitious management The promoter should have high stake in the company, skin in the game is necessary.
l Large in Aspiration Management Must have clear 10 years vis. Ambition plus execution combined makes a multibagger. E XL Market Potential. There should be a big opportunity in the industry. A company worth Rs 500 crore and a market share of Rs 50,000 crore gives more growth opportunities there. If you see, Atul Auto was a smaller company than ₹50 crore when he bought it for ₹5 and held it till ₹800 as predicted by Smile.
So if we look at SMILE, S is small company, M is medium experience, I is integrity of management and L is large in aspiration, E is extra large market potential, this is Vijay Kiddji's screening tool, even after SMILE, Vijay Khedia applies three more filters before investing. Missing these three things means putting your money at risk.
Filters number one industry tailwind. Not just the company, the entire industry should be growing. This should happen consistently for 10 to 15 years. If you look at KDA's portfolio for 2026, infrastructure, technology exports, domestic spending, all these are not short term bedes, these are decade long tail.
A good company will not operate in a bad sector. Filter number two promoter skin in the game. How much shareholding should a promoter have in his own company ? KD is ideal for those looking for 50% plus promoter holding. Meaning the promoter has a personal incentive to succeed. If the company sinks, the promoter will also sink.
If the promoter is selling his stake then it is a red flag. Filter number three is balance sheet clarity. Three things should be seen in the balance sheet. Low days, strong cash flow, reinvestment capacity. A company with too many debts collapses at a difficult time. And the holding period of KDA is 5 to 10 years.
So it is important for the company to both survive and grow. Let's look at the Smile Framework in real examples. Atul Auto (Small) 50 crore market cap Gujarat based three wheeler company M Medium experience Established but not mature I Management ambitious Clear EV CNG expansion viz E XL potential Last mile connectivity market is massive in India Result purchased shares at ₹500 and held it till ₹800 which gave ₹160 times return Cera Sanitary Ware (Small) bathroom fitting company Ignored by institutions M Established manufacture proven product I Management committed Reinvesting in brand and distribution E India's urban housing boom should happen which is already there Result purchased shares at ₹30 and held it till ₹4800 which gave around ₹16 times return So what to learn from this that different sector different company but same smile framework in both and got returns of more than 100 times in both Strategy [from nose [voice being made] It is not just what to do, it is equivalent to what not to do.
Four Biggest Never Rules of Vijay Kedia Ji. Rule number one is never over diversify. Kedia invests in only 15 to 20 stocks. He says diversification for the check up is a mistake. When you invest in 50 stocks, you are basically investing in an index fund. But without index, low cost, high concentration, high conviction, this is their approach.
Rule number two is never over trade. Most wealth is made by singing, not rotating. The average holding period of KD is more than 5 years. He sits after buying the stock. He does not think whether the market goes up or down. Trading costs, taxes and wrong timing are all side effects of over trading. Rule number three: Never rely only on PE and ROE.
They do not depend on complex financial ratios. Let's look at the fundamentals. Such as management quality, business model, growth potential. Numbers are important, but numbers alone don't tell the whole story. An honest ambitious management can beat an average PE ratio. Rule number four: never buy crowded popular stocks.
If you buy a popular stock, its price ratio increases at that time. When everyone purchases, either KDI is invested or else they have already exited. Because by then the stocks already become 5 to 10X. If you found this video helpful, please like and subscribe to Psharbit for more investor breakdowns.
Tell us in the comments which point in the Smile Framework you found most useful. See you in the next video.
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