Philosophy & Strategy

Investing in equity requires an in-depth knowledge about the company, its nature of business, and the future potential of the sector. As part of our core investment strategy for equity, we follow a top-down approach for asset allocation and sectoral exposure, and a bottom-up approach for selection of stocks within the identified sectors. In the top-down approach we look at a few factors like growth of economy, inflation & interest rate scenario, stability in foreign exchange, government/private borrowing and fiscal & current account deficit among others. In the bottom up approach, focus is on factors like company's expected rate of growth & profitability, debt/equity ratio, market share and corporate governance.

Following are the broad parameters for investment in equity.

• The shares should be actively traded.
• The company should have a good management track record and growth prospects.
• The company should demonstrate a strong and sustainable business model.
• The company should have a strong net worth.
• Investment in equity will be done after detailed analysis of the promoter's business, profitability and market outlook.

We have been primarily investing in Nifty stocks with good management. The allocation to non-Nifty stocks are done selectively in companies with a sound fundamental growth story or corporate actions e.g. buybacks, bonus, dividend etc. Also, investments in primary market issues (IPO/FPO) are made after analysing prospects of gain over long term.