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What is GIFT City: A Complete Guide for Investors

India is rapidly transforming into a global financial hub, and GIFT City (Gujarat International Finance Tec-City) stands at the forefront of this revolution. Located in Gandhinagar, Gujarat, GIFT City is a meticulously planned business district designed to rival the likes of Singapore, Dubai, and London. With its high infrastructure, regulatory advantages, and tax incentives, GIFT City is becoming a magnet for global investors and businesses.

In this blog, we’ll explore what makes GIFT City an attractive investment destination and the opportunities it offers for those seeking to be part of India’s growth story.

What is GIFT City?

Launched as a visionary project to position India as a global financial powerhouse, GIFT City is the country’s first International Financial Services Centre (IFSC). It combines modern infrastructure, liberal regulations, and tax benefits to create a seamless business environment for financial and IT companies. GIFT City is not just a financial district but a symbol of India’s ambitions to integrate into the global financial ecosystem.

Key Features That Make GIFT City Stand Out:

1.Special Economic Zone (SEZ) with Tax Benefits

GIFT City operates as an SEZ, offering multiple tax advantages for businesses and investors. These include:

Exemption from Securities Transaction Tax (STT), Commodity Transaction Tax (CTT), and Long-Term Capital Gains Tax.
Lower corporate tax rates for entities operating within the IFSC.
A highly competitive tax regime designed to attract foreign investments.

2.World-Class Infrastructure

The district boasts sustainable infrastructure, including:

Smart buildings and energy-efficient utilities.
Advanced waste and water management systems.
Automated transportation solutions to support seamless business operations.

3.Ease of Doing Business

GIFT City offers a regulatory framework tailored for financial services and IT companies. Simplified compliance processes and a business-friendly environment have been instrumental in attracting both startups & global corporations.

4.Access to a Global Financial Ecosystem

GIFT City houses India’s first operational IFSC, enabling:

Offshore banking and asset management services.
Cross-border financial transactions without the need for operations in foreign hubs like Dubai or Singapore.
Opportunities for foreign companies to establish a presence in India under favorable regulations.

5.Incentives for Investors

Investors in GIFT City enjoy significant cost savings due to:

Reduced operational costs compared to other financial hubs.
Access to high-growth sectors like manufacturing, technology, and consumer discretionary.

Which funds to Invest in GIFT City?

Individuals and institutions can tap into high-growth opportunities through specialized funds domiciled in GIFT City.
Here are three standout investment options:

1. Alchemy India Long Term Fund (AILTF)

Investment Philosophy

Alchemy India Long Term Fund is built on the principle of ‘Growth at a Reasonable Price’ (GARP). This strategy focuses on identifying Indian companies with scalable business models, strong competitive advantages, and higher-than-average Return on Capital Employed (ROCE).

Key Highlights:

Experience and Track Record: Managed by a seasoned team with over 30 years of equity market expertise, Alchemy boasts an annualized alpha of 4.9% since its inception in 2008.

Portfolio Composition:

Concentrated investments in 20–40 stocks, selected based on rigorous bottom-up research.
Diversified across market capitalizations, with a focus on publicly listed Indian companies.

Performance: Historically, the fund has consistently outperformed the BSE 500 Index, leveraging its strong growth fundamentals and disciplined risk management.

Why Choose Alchemy?

Alchemy stands out for its long-term focus, robust risk management, and ability to identify high-growth opportunities in sectors driven by macroeconomic trends. It is a go-to option for investors seeking steady returns with lower exposure to short-term volatility.

2. Motilal Oswal GIFT City Fund

Investment Strategy

Motilal Oswal’s GIFT City Fund adopts a multi-cap, long-only strategy focusing on high-growth Indian equities. The fund prioritizes themes like “China+1,” Make in India, and Urbanization, ensuring alignment with India’s economic trajectory

Sectoral Allocation:

Manufacturing and Capex: 31.9%
Consumer Discretionary: 26.2%
Power and Energy: 16%

Performance:

The fund has delivered a 56.2% return since March 2023, significantly outperforming the BSE 500 Index and MSCI India benchmarks.

Notable Holdings:
Includes APAR Industries, Zomato, Suzlon Energy, and Trent Limited, which represent diverse growth opportunities

Why Choose Motilal Oswal?

Motilal Oswal’s fund is ideal for investors looking for:

Exposure to emerging sectors like renewable energy, consumer tech, and infrastructure.
Strong alpha generation through a disciplined investment approach.
Diversification across small, mid, and large-cap stocks.

3. Global Compounders Portfolio (GCP)

Investment Philosophy

GCP focuses on identifying globally dominant companies with strong moats, aligned management, and predictable cashflows. The fund leverages proprietary frameworks like TORQUE and forensic accounting to maximize returns while managing risks.

Sectoral Allocation:

Industrials: 40%
Information Technology: 26%
Consumer Discretionary: 12%

Performance:
Since its inception in October 2022, GCP has delivered a remarkable 34.19% return in USD terms, outperforming the S&P 500.

Key Features:

Global Exposure: Targets 20–30 companies across North America and Europe, ensuring diversification beyond Indian markets.

Sustainability and Longevity: With over 40% of its portfolio in family-run businesses, GCP emphasizes sustainable growth and strong governance.

Why Choose GCP?

GCP is suited for investors seeking global exposure with a disciplined, research-driven approach. It focuses on megatrends like digitalization, re-industrialization, and premium consumption, making it an excellent option for long-term wealth creation.

‘GIFT City’ represents a transformative opportunity for investors, offering tax benefits, regulatory ease, and access to high-growth funds. With options like Alchemy, Motilal Oswal, and GCP, investors can tailor their portfolios to achieve their financial goals while capitalizing on India’s ascent as a global financial powerhouse.

Do you want expert guidance to understand more about GIFT CITY investments?

Visit https://aifpms.com/ or call us at +91 95616 10108 to connect with seasoned professionals and discover the right strategy for your financial goals!