Alchemy India GIFT City Fund

Alchemy India Long Term Fund (The Fund) 2 continues its strategy and investment philosophy using a number of levers to generate long-term absolute returns on investor capital. The Fund takes long-term concentrated positions in publicly listed companies in India without being benchmarked to any index. From time to time, the Fund will invest in PIPES and IPOs that the management team deems compelling.

Growth at a Reasonable Price: This approach is rooted in the hypothesis that India is a high-growth economy and that the best way to benefit is to identify and invest in companies that are best equipped to take advantage of the emerging domestic and global opportunities.

Invest for the Long Term: The intention is not to trade in and out of investments to capture short-term volatility.]

Alchemy follows a philosophy focused on achieving consistent and superior long-term absolute returns by investing in growth companies with strong management teams. The investment process is built around three core pillars:

1. Robust Financial Metrics
   Alchemy favors businesses that address large, growing external opportunities. These companies must have a competitive edge in capitalizing on those opportunities and possess a scalable business model with a higher-than-average Return on Capital Employed (ROCE) over the investment horizon.
2. Strong Growth Fundamentals
   While growth companies form the backbone of its portfolio, Alchemy also strategically invests in deep value opportunities and special situations that arise due to or during market cycles.
3. Exceptional Management Teams
   Alchemy places great emphasis on the strength of management teams. They seek businesses where management is aggressive, aligned with business outcomes, and maintains a strong focus on governance and capital allocation.

Investment Process

Alchemy’s investment process involves a systematic and multi-step approach to identifying and evaluating investment opportunities. The firm uses investment filters and regularly interacts with trade and industry analysts to build a comprehensive view, ensuring more accurate recommendations. Here’s a breakdown of the process:

1. 1. Idea Generation
      • Stocks are identified based on long-term secular themes and trends driven by macroeconomic and policy assessments.
      • Portfolio Managers and analysts generate stock recommendations.
      • Quantitative screening is conducted using a universe of approximately 350 stocks.
      • Ideas are formed through company visits, management meetings, and sector-specific conferences.
   2. Meeting Management & Industry Experts
      • The team builds an initial understanding of the company’s business and financial model from publicly available information.
      • Interaction with the company’s ecosystem, including management, suppliers, and competitors, provides deeper insights.
      • Analysts and fund management encourage extensive engagement with a wide ecosystem of companies.
   3. Conduct In-depth Analysis & Evaluation
      • Analysts pitch ideas to the investment management team.
      • The team debates the qualitative and quantitative assessments of the businesses to ensure alignment with Alchemy’s investment framework.
      • A combination of financial metrics, valuation, and risks are analyzed.
      • If the stock satisfies the criteria, it is included in Alchemy’s Investment Universe.
   4. Portfolio Construction & Ongoing Review
      • The Portfolio Manager constructs the portfolio in alignment with the firm’s philosophy and mandate.
      • Continuous monitoring and rebalancing of the portfolio take place, adjusting positions based on market changes.
   5. Exiting Positions
      • There is no fixed price for exiting, but exits are triggered by a thorough risk-reward review.
      • Stocks may be exited under the following conditions:
        • Major change in investment hypothesis.
        • Need to be rebalanced the portfolio.
        • Risk-reward analysis no longer favors the holding position.