Alchemy Small Cap

About Company

Alchemy Group, a leading investment management firm in India, has been operating successfully since 2002. Founded by four seasoned equity market professionals, each with more than 30 years of experience, the group boasts a strong foundation. Under the leadership of its Chief Investment Officer, Hiren Ved, the team, which has collaborated for over two decades, has fostered a culture of excellence and established an institutional pedigree focused on consistently delivering superior performance to its clients. The Alchemy Group currently manages assets worth USD 1.2 billion. Alchemy is led by Co-Founder Hiren Ved, who also serves as the Director & CIO. With a strong continuity in investment philosophy and strategy, Hiren and the Alchemy team have cultivated a culture of performance excellence. This has been instrumental in maintaining a consistent track record in their investment strategy. Alchemy boasts a comprehensive network of relationships developed over decades. This network provides the team with valuable insights into stocks, sectors, businesses, and potential investment opportunities, ensuring they remain ahead of market trends.

Fund Snapshot

Objective	To generate long-term risk-adjusted returns
Type of securities	Equity
Investment Approach	Company Fundamentals & Risk & Reward Ratios
Portfolio Allocation	Up to 100% in equity
Portfolio Construct	Max of 50 stocks
Benchmark	BSE 500 Tri
Investment Horizon	3 to 5 years

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About Fund Manager

Alok Agarwal

Alok Agarwal, who serves as Head of Quant and Fund Manager at Alchemy Capital, possesses more than 22 years of expertise in equity fund management. Since joining Alchemy in 2022, he has utilized his proficiency in quantitative investing to develop robust investment strategies. Before this, he oversaw flagship funds and managed the offshore equity desk at PGIM India AMC. His professional journey also includes significant positions at Deutsche Asset Management, KR Choksey Securities, Tata Group, and Pinnacle Academy. Alok is a holder of esteemed CA, CFA, and CMT credentials, complemented by a Master’s degree in Commerce and Finance.

Investment Style

At Alchemy Capital Management, the investment philosophy is driven by a quantitative approach to ensure a disciplined and unbiased strategy for generating consistent alpha.

Key Principles:

Right Stock + Right Theme + Right Sector + Right Market Cycle = The formula for a successful investment strategy.

Why Quantitative Investment?

Traditional active investing relies on subjective decision-making and forecasting based on individual perspectives, leading to inconsistencies.
The Alchemy Capital quantitative investment model is data-driven, model-based, and rigorously back-tested to eliminate human biases.
Portfolio construction focuses on optimal timing and risk-reward metrics to achieve sustainable returns.

Investment Criteria

Alchemy Capital investment approach is structured around three core pillars:

1. Growth

Revenue Growth
Income Expansion
Free Cash Flow Generation
Capital Expenditure (CAPEX)

2. Market Cycle

Performance vs. Market Index
Relative Drawdown Management
Price Performance Analysis
Volatility Assessment
Shareholding Trends

3. Fundamental Metrics

Cash Conversion Cycle
Working Capital Efficiency
Return on Capital
Debt Levels

These factors are an integral part of the Alchemy Quant Proprietary Model, ensuring an objective and structured approach to investment decision-making.

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Fund Overview

Alchemy Alpha Small Cap is one of the Portfolio Management Services products managed by M/s Alchemy Capital Management Pvt. Ltd., a SEBI-registered Portfolio Manager.

Alchemy Alpha Small Cap is a rule-based algorithm driven strategy that is sector agnostic, based on data and researched processes. A High-Risk High Return oriented strategy which aims at generating long term alpha consistently by investing in small cap companies.

The fund is diversified across various sectors, with top holdings including Blue Star Ltd (6.4%), Nippon Life India Asset Management Ltd (5.8%), and Firstsource Solutions Ltd (5.7%). Other notable stocks include Aegis Logistics Ltd, Cholamandalam Financial Holdings Ltd, and Kfin Technologies Ltd. Sector & Market Cap Allocation Industrials (33.0%) and Financials (21.4%) form the largest sector allocations, followed by Consumer Discretionary (10.4%) and Consumer Staples (9.1%). The fund is heavily invested in small-cap stocks (66%), with mid-cap exposure at 32% and cash allocation at 2%.

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