Axis NewGen India Fund – 1

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About AMC

Axis is one of the leaders in managing a large portfolio of companies in public markets. they have demonstrated capability in portfolio construction, portfolio management, and strong performance across their offerings. The Axis team has sourced and invested in several unlisted companies across multiple sectors (e.g. NSE, SBI General, Bikaji Foods, Fab India, etc.) which have delivered superior business performance over a period of time.

Fund Snapshot

Fund Type: Category – 3 AIF
Structure: Close ended
Target Size: INR 750 Cr + INR 750 Cr (Green Shoe)
Term: 4 Years from Final Closing, may be extended for two additional periods of one year each
Upfront Contribution: On signing of Contribution Agreement – 20% of the Capital Commitment
Commitment Period: 12 months from Final Closing, may be extended by a period of six months
Set Up Fee: Up to 1% of Capital Commitment for Class A, B & C unit holders
Lock in Period: 12 months from Final Closing
Preferred Return: 12% (p.a. IRR) (Not applicable to Share class A1,B1,C1,A3,B3,C3)
Carried Interest: 15% (without catch up) (Carried Interest for the Investment Manager)

Capital Commitment:

  • Class A Units ≥ INR 1 Cr and < INR 5 Cr
  • Class B Units ≥ INR 5 Cr and < INR 10 Cr
  • Class C Units ≥ INR 10 Cr

Exit Load:

Withdrawals made after the end of the Lock-up Period shall be subject to an Exit Fee as given below:

  • 3% of the NAV: If exit takes place after the lock-up period and up to the 24h month from final closing
  • 2% of the NAV: If exit takes place after the 24th month and before the 36th month
  • 1% of the NAV: After 36 months from the final closing

Fee structure

Class Minimum capital commitment Fixed Management fee (% p.a) Performance Fee
A1 Rs 1 crs to < Rs 5 crs 2.50%
NIL
B1 Rs 5 crs to < Rs 10 crs 2.25%
NIL
C1 More than Rs 10 crs 2.00% NIL
A2 Rs 1 crs to < Rs 5 crs 1.75% 15% over 12%
B2 Rs 5 crs to < Rs 10 crs 1.50% 15% over 12%
C2 More than Rs 10 crs 1.25% 15% over 12%

Sector Allocation

Businesses driven by New age tech and IP based scalable, disruptive enterprises

  • Companies operating in industries that are technology / IP based and are innovative
  • Companies operating in industries with favourable operating dynamics

Targeted Sectors

  • Banking & Fintech
  • Healthcare / Biotechnology
  • Technology / IT services
  • Chemicals & Speciality Chemicals
  • Internet / E-Commerce
  • Automotive / Mobility
  • Omni-channel retail

Few Of The Drivers Of Our Selection Criteria

Banking & Fintech

Both traditional Banking and FinTech witnessing growth, Digital transformation propelling next leg of growth, FinTechs focusing on underserved market opportunities

Technology & IT Services

Indian IT players geared for multi-billion dollar/ multi-year deals across verticals, New Age Technological Solutions -SaaS and Deep Tech solutions, IT Digital services

Healthcare & Biotechnology

Indian companies targeting higher margin complex generics, PLI schemes, India has the largest number of US FDA-compliant manufacturing facilities outside the US

Chemicals, Speciality chemicals

Indian companies focusing on greater specialization, China +1 opportunity

Internet & E-commerce

Large Target market, Low market penetration, Improving profitability/unit economics, Internet landscape – Ecommerce, Life services, Entertainment, Digital advertising

Automotive & Mobility

Increased focus on Evs, New age business on developing electric mobility space, Technological solutions-based manufacturing of rechargeable Lithium-ion batteries

Omni-Channel Retail Businesses

Convergence of Traditional and Online channels, Active interplay of tech solutions and digital savvy consumers, Growth of D2C as retailers pass intermediaries to reach consumers faster

Key Features

  • Theme: Companies which can benefit from the underlying change driven by Technology and Technology enabled innovation and sciences over the coming years
  • Fund proposition: Targets a bottoms up exercise on opportunities in both listed and unlisted companies. 70 to 100% in listed companies where change is driven by technology & Sciences, 0 to 30% Pre-IPO opportunities with a potential for listing over the 9–12 months
  • Businesses which are market disruptors, have a technological edge, high ROE/RoCE, stronger market share in their segment etc. are few of the drivers of our selection criteria 

Portfolio construction

A diversified portfolio of spread across sectors and market cap

Top Down

Companies operating in businesses/ industries that are technology, IP based and are innovative

Bottom Up

Companies in industries with favourable operating dynamics

Pre-IPO

Pre-IPO opportunities with a potential for listing over the 9–12 months 

Why invest in Axis NewGen India Fund – I?

  • Interesting mix of Listed and Unlisted investments
  • Capture disruptive growth opportunities
  • Product differentiation
  • High growth potential

Fund Manager Profile

Hitesh Zaveri – SVP & Head (Listed Equity Alternatives)

Hitesh joined Axis AMC in 2022 as SVP & Head – Listed Equity Alternatives. He is responsible for managing the Axis PMS portfolios along with relevant CAT-3 AIF strategies. Hitesh has over 25 years of experience in portfolio management, investment banking and equity research.

Prior to joining Axis AMC, he served as Head of Investments in the PMS business at Aditya Birla Mutual Fund. Hitesh has also worked with Enam Asset Management as Executive Director & Portfolio Manager and Edelweiss Capital as Senior VP & Co-Head of Institutional Research. He has managed large equity funds, authored research reports and executed several transactions in M&A, IPO and IB assignments that involved Restructuring and Delisting in his past roles.

Hitesh has contributed his research to a book co-authored by two Harvard Business School Professors – ‘Wall Street Research – Past Present & Future’, co-authored by Prof. Boris Groysberg and Prof. Paul Healy, published by Stanford Press.

Qualification: MBA from Mumbai University, Hitesh has also completed Advanced Management Program, Investment Management Program, and General Management Program from the Harvard Business School and Executive Development Program from The Wharton School. Furthermore, he is an alumnus of Harvard Business School and an Advisor to the Board of HBS Club of India.

Current Top 10 Portfolio

Stock Target Themes / Sectors % of Portfolio
Rategain Travel Technologies Limited
Technology / IT services 5.48%
Cyient Limited
Technology / IT services 4.93%
ICICI Bank Ltd
Banking & Fintech 4.63%
Bank of Baroda
Banking & Fintech 4.48%
PB Fintech Ltd
Banking & Fintech 4.33%
Federal Bank Ltd Banking & Fintech 4.21%
Ashok Leyland Ltd Automotive / Mobility 4.09%
One 97 Communications Limited Banking & Fintech 3.98%
Exide Industries Limited Automotive / Mobility 3.78%
IndusInd Bank Limited Banking & Fintech 3.72%

Fund Proposition

Bottom up stocks selected which are a mix of Listed and Unlisted opportunities

Types of Investments:

  • Listed companies where change is driven by Technology and Science: 70% to 100%
  • Pre-IPO opportunities (New-Age / Disruptive Business driven by Tech and Science): 0% to 30%
  • Debt: 0% to 20%

What They will Try to Avoid

  • Traditional businesses: Businesses which are not open to change and technological adoption
  • High Valuations: Creates lower margin of safety, can be a hurdle to delivering outsized returns
  • Corporate misgovernance: Past instances/ track record of poor corporate governance
  • Portfolio concentration: Reasonable diversification across sectors and stocks to ensure low portfolio drag

Company characteristics that the fund will look for

  • Market Disruption
  • Technological Edge
  • High RoE / RoCE
  • Ability to Acquire Scale
  • Long Term Growth Potential
  • Gaining market share

How Can Investors Benefit?

Contribution to GDP growth

  • 6.6 Lakh direct jobs and 34.1 Lakh indirect jobs created by Indian start-ups in the last decade
  • Job creation has a direct correlation to GDP growth and thereby equity growth
  • Indian start-up ecosystem estimated to add $25-$30 Billion to Indian GDP by 2025

Listing of new businesses

  • New Generation businesses may not have a shortage of capital
  • Innovative businesses coming to the forefront as access to scale has become easier
  • Supportive growth environment to ensure new business listings

Inorganic growth opportunity for traditional businesses

  • Product and market expansion will drive M&As in the coming years
  • Inorganic growth should become a key part of gaining market share
  • Possible sectors for market consolidation can be EdTech, BFSI, Consumer Tech and Enterprise Tech

Emergence of breakout sectors

  • The current investible universe is limited
  • Investing opportunities restricted to traditional sectors
  • Emergence of breakout sectors such as Agri Tech, Gaming, Block chain, B2B Commerce will ensure diversification and expand the investible universe

Book a call with our experts

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Disclaimer: Investing Involves Risk. This document is for information purposes only and should not be viewed as a legal offering document or solicitation. Offers to invest in this fund are made only by the Discretionary Portfolio Management Services Agreement. Past performance does not guarantee future results and there is no assurance that the managed accounts will necessarily achieve their objectives. We do not guarantee any returns in the hand of investors not we take any sort of accountability for the performance of the scheme. The above-mentioned data is collected from the respected Fund house please verify the same at SEBI website.