Mumbai, Apr 24: Arihant Capital Markets Limitedtoday announced the launch of the Arihant Bharat Advantage Fund, an open-ended Category III Alternative Investment Fund designed to identify and invest in high-potential businesses outside the conventional universe of large-cap stocks. The fund is built on a straightforward insight: a large part of institutional capital and analyst coverage is concentrated in a limited set of companies, while a significant portion of the listed universe particularly small, micro, and nano-cap companies i.e. nearly 86% of the listed market remains underpenetrated. This broader universe presents meaningful opportunities for disciplined investors willing to conduct independent research.
Historical data supports this approach. According to market analysis, nearly 80% of the decade’s ten bagger stocks originated from the small-cap segment, demonstrating the wealth creation potential in less-followed areas of the market.
“A large part of the capital today flows into a relatively small set of names,”said Arpit Jain, Joint Managing Director & CEO, Arihant Capital Markets Limited.”When you look beyond that, you find businesses that are earlier in their growth cycle and often less efficiently priced. Our approach is to identify these opportunities with discipline and patience.”
The investment approach follows a bottom-up philosophy, focusing on high-growth smaller companies with strong balance sheets, quality management, valuation comfort, and a clear margin of safety. The fund employs a core-plus-satellite investment framework. The core portfolio focuses on long-term, fundamentally strong businesses aimed at consistent compounding. The satellite portfolio pursues opportunistic ideas—emerging small-caps, turnarounds, and event-driven opportunities—to enhance overall returns while remaining responsive to market conditions. The strategy aims to generate asymmetric returns across investments by combining steady compounders with high-conviction opportunistic ideas.
Capital will be deployed across four broad categories: established companies with consistent performance, high-growth emerging businesses, turnaround situations available at attractive valuations, and special situations arising from corporate or regulatory events.
“In segments like small caps, stock selection is critical because outcomes can vary widely,”said Hardik Shah, Chief Investment Officer, Arihant Alternate Capital Trust.”We focus on identifying companies with sound governance, durable business models, and the ability to scale over time, rather than chasing short-term trends.”Risk management is embedded in the fund’s structure, with a focus on generating disproportionate returns while aiming to minimize downside risks. The team retains flexibility to adjust exposures based on market conditions and maintain diversification across strategies to manage downside risk. However, given the focus on businesses beyond the conventional large-cap universe, the strategy entails relatively higher risk.
Arihant Capital brings over three decades of experience in financial markets, supported by in-house research capabilities and a platform spanning institutional broking, portfolio management, and investment advisory services. This foundation enables the deep market understanding and corporate relationships necessary for identifying opportunities that institutional coverage typically misses.
The fund is positioned for high-net-worth individuals, family offices, and institutional investors seeking access to differentiated investment strategies aligned with India’s evolving economic landscape. The minimum investment will be ₹1 crore, in accordance with SEBI regulations for Category III AIFs.
