The fund management arm of the InCred Group announced the launch of Emerging Business Fund a Close-ended Category III Alternative Investment Fund that aims to invest in the stocks of India’s growing businesses to deliver superior returns.
The investment is based on the theme, ‘Capex to drive the next decade’. Fund’s focus is on factors making current environment most favorable for investors such as Export Demand (China + 1 benefits), Deleveraged Balance sheet, Government Incentive (Production-Linked Incentive), Very Low Interest Rates, and Continuous Domestic Demand.
As per World Bank & IMF data India has crossed $2000 per capita income mark and is expected to reach $3000 mark by FY25E and $4700 by FY30E, over 500mn people crossing the $2000 per capita income mark would drive discretionary consumption, this spending likely to see impact in healthcare, mobility, Consumer durables, communication, entertainment, recreation, and travel etc. Merchandise exports touched almost 335 billion in April-January 2022, a 27.0% increase over same period in 2019.
India’s Growth in the pandemic phase has been driven by investments, reflecting the governments’ capex development along with gradual recovery in consumption. Government capex has picked up pace in FY2022 with both central and state governments registering strong growth in 1HFY22. FY23 Central government budgeted Capex 7.5 lakh cr vs 5.5 lakhs cr in FY22 (a sharp 35% jump)
The ambition of achieving Atmanirbhar Bharat through government incentives is a catalyst for private sector investments.
A strong investment inflow creates a virtuous cycle resulting in strong demand across sectors, employment opportunities, accelerates banking and financing markets, which in turn drives overall discretionary and non-discretionary consumption and leads to higher ROI.
The fund would be managed by Mr. Mrinal Singh, CEO & CIO- InCred AMC who has almost two decades of rich experience in Investment Management and Equity Research. He has a track record of delivering industry-leading returns through market cycles and has been awarded and recognized at various industry forums and consistently rated highly by Morningstar.
The Fund aims to primarily invest in midcap and small cap stocks that can benefit from strong growth in earnings and re-rating of businesses. The AMC’s well defined investment framework helps in quality stock selection. It also has a sound understanding of Indian corporate governance that helps in identifying the right businesses.