abakkus smart build india portfolio
TRANSCRIPT
• Abakkus is alpha focused asset management firm set-up in 2018 by Sunil Singhania.
• Sunil, a CA Rank Holder and CFA charter holder, has a distinguished track record of over 2 decades in Equity Investments.Earlier as CIO-Equities for Reliance Mutual Fund (now Nippon India Mutual Fund), he played an instrumental role in buildingRMF (now Nippon India Mutual Fund) into one of India’s largest AMCs overseeing ~USD 11bn of equity assets.
• Reliance Growth Mutual Fund (now Nippon India Growth Mutual Fund), independently managed by him, has the uniquedistinction of having grown over 100 times in 21 years. Reliance Small Cap Mutual Fund (now Nippon India Small Cap MutualFund) was rated amongst the top Mutual funds in its category.
• He is currently appointed on the IFRS Capital Markets Advisory Committee (CMAC) and the only member from India to beappointed for the same. (2020-2023).
• He served on the Global board of CFA Institute, USA (2013-2019) and as Chairman of the Investment Committee (2017-2019)of the CFA Institute, USA.
• Abakkus is managing ~ Rs 6,000** crs across AIF, PMS and Advisory platform.
INTRODUCING ABAKKUS INVESTMENT ADVISORS*
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CA Chetan Vora has over a decade of equity market experience.
• Prior to Abakkus Asset Manager LLP, he has been associated as an equity research analyst for organizations like ValueQuestInvestment Advisor, Edelweiss and Brics, whereby he has tracked multiple sectors like Capital Goods, Auto, Auto Ancillary,Consumer Durables, Infrastructure Sectors, etc.
• His expertise lies in stock selection across the market cap with strong focus on bottom-up research.
• Chetan is Chartered Accountant by Profession and has cleared CFA level 2.
ADVISOR PROFILE***
*Investment Advisory Division of Abakkus Asset Managers LLP, ** as on dated 31st AUGUST 2021, ***Person Associated with Investment Advice
• Believe in investing with an endevour to generate alpha over the markets than just allocation within benchmark index• Growth companies where profitability is expected to grow higher than market average• Fundamentally underpriced stocks with reasonable growth expectations to triggers• Mid Cap companies with a scalable business model and growth potential to become large cap
ALPHA GENERATORS
• Bottom-up research with focus on Balance sheet
• Numbers speak more than presentations and hype
• Returns ultimately are all about earnings, earnings & earnings
FUNDAMENTAL DRIVEN
• Prefer to be first, early and/or only investors
• Don’t chase momentum
• Open to look at companies across sectors and market caps and business cycle
HAPPY TO BE CONTRARIAN
• Each investment opportunity is looked upon individual merit
• Not constrained to a particular theme or styleAGILE & FLEXIBLE
• Buy and hold
• Invest in a stock as if investing in a business
• Think like a partner
PATIENT INVESTORS
• Estimated expected returns in line with risk taken
• A good company might not necessarily be a good stock
• Focus on the price we pay, and value derived
• What is in the price?
RISK REWARD EQUATION
INVESTMENT PHILOSOPHY
3
OUR UNIQUE MEETS FRAMEWORK
Management
Earnings
Events/Trends
Timing
Structural
Quality - Capability a n d track record
Capital Allocation – c a p e x is fine if ROE is maintained or e n h a n c e d
Capital Distribution – fair to minority shareholders
Error in decision – Business errors vs intentional mishaps
Quality of earnings vs reported numbers
Actual earnings vs exp ected
Cycl ical vs Structural earnings
Companies that c a n double profits in 4 years or less or where EV/EBITDA c a n halvein four years
Stock movement b ecau se of events. C a n b e Buy or Sell opportunity
Events on the horizon
Disruptive trends/New themes
G o o d co m p a ny is not necessarily a g o o d investment if price is not right What
is the price discounting
Time frame of investment
M e a n Reversion
Size of the opportunity
Competitive positioning / MOAT
Consistent growth in profits
www.abakkusinvest.com 4
Chase Momentum We would let fundamentals drive our investment decision rather than price movements
Avoid the four “C”s
Churn Unnecessarily
Copy & Mimic
Analyze, research, be convinced and then BUY. Once done, STAY PUT. No needlesschurning of the portfolio
We will not be influenced by ‘herd mentality’. All investments have to be necessarilyworked internally
Credit Risk - Fractured Balance Sheet
We believe it is very difficult to rebuild a broken balance sheet and these stockseventually turn value traps and hence, are best avoided
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WHAT WE WON’T DO
• OPPORTUNISTIC
• Greater flexibility in investing compared to mutual funds
• PERFORMANCE
• Abakkus has a well-established performance track record since inception
• EXPERIENCE
• Backed by a well qualified and performing team of professionals that have experience across market cycles
• COMMITMENT
• Follow a start-up culture with a high degree of commitment, ethics and passion
• POSITIONING
• Differentiated Alpha focused strategy
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WHY US: OUR ADVANTAGE
• Benchmark agnostic thematic differentiated portfolio adhering to our “MEETS” Framework
• Investment universe predominantly of companies benefiting from economic development as a result of potential investments in
infrastructure, capacity expansions, thrust on domestic manufacturing and unfolding economic reforms
• Fundamental based ideas picked via a bottom-up approach
• Investments with typically 3-5 years holding period
• Portfolio of ~25 companies across multiple sectors, single stock exposure limited to less than 10%
PORTFOLIO CHARACTERISTICS
Minimum Capital Contribution Rs. 5 Lakh and above
Client Suitability For thematic equity allocation for aggressive investors
Indicative Benchmark* Nifty Infra Index
Fixed fees 2.5% p.a. of the Assets under Advice
FEATURES
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Advisory Fee will be charged quarterly advance/monthly arrears. Advisory Fees are non-refundable. Plus GST and all statutory levies as applicable.. For more details on fees, please refer to the
client agreement. * Benchmark agnostic thematic differentiated portfolio adhering to our “MEETS” Framework
PORTFOLIO CONSTRUCT
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Predominantly investing in sectors
benefitting from Build India theme.
• Investment Universe
200 companies
• Filtered for Management Quality , Corporate Governance, Sector headwinds, etc
120 companies• In-depth research,
Financials & bottom up approach
20-25 companies
•Valuation , favourable Risk-reward equation, diversification , liquidity
CAPEX DRIVERS GETTING IN PLACE FOR NEXT UPTICK
India Capex Cycle
2003 – 2005 2006 – 2008 2009 – 2012 2013 – 2020 2021 – 2024
Early signs of commodity price increase
Strong private participation in power, steel and cement
Excess capacity starts building up post ’08’09 crisis
Lower commodity pricesBalance sheet strengthens across large companies
Electricity Act-Opening up of power sector
Commodity prices on strong
Leveraged private players especially in power and steel sector
Adverse real estate cycle with massive excess inventories
Large assets under NCLT resolved
Higher Govt Spendup-move globally triggering capex
Demand drops due to global slowdown and domestic policy paralysis
Excess supply across sectors
Falling corporate NPA cycle
Pick up in residential real estate
Balance sheet repair with gradual consolidation in market share with few players
Residential Realty, Govt spend and favourable global demand
PLI incentives system might pre-empt/fast track potential capacity addition
Govt Capex CAGR (%) 23% 8% 11% 12% Start of an upcycle led by:
WPI Inflation (%) 5.50% 5.50% 8.10% 1.60% ▪ Deleverage trend across sectors
▪ Demand-led Inflation should drive utilization and capex
▪ Rising trend of Environmental clearances granted; More brownfield capex to follow
Cost of Debt (%) 6.70% 9.30% 9.20% 8.10%
Corporate Credit growth (%) 23% 24% 22% 3%
Liquidity/Excess SLR (%) 16.30% 4.90% 4.70% 7.20%
Private sector in Public Infra Low High Very High Low
Residential Real Estate Strong Growth Moderate Growth Strong Growth Slowdown/Consolidation
Global Outlook Positive Very Positive Negative Positive since Oct-20
Cycle Bottom/
Early RecoveryMid Cycle Late Cycle Down Cycle
Cycle Bottom/
Early Recovery
Source: RBII, Ministry of Finance, Spark Research 10
CASE FOR BUILD INDIA PORTFOLIO
Source: Bloomberg, Ace equity 11
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Nifty 50 v/s Nifty Infra
Nifty 50 Nifty Infra
2004-2005 2006-2008 2009-2012 2013-2020 2021-2025E
Nifty 50 returns
48% 4% 95% 135%Anticipating
Capex sector to outperform as order inflows and execution
picks up
Nifty Infra index returns
87% 34% -4% 40%
Cycle Bottom/
Early RecoveryMid Cycle Late Cycle Down Cycle
Cycle Bottom/
Early Recovery
WHY LOOK AT INFRA NOW
• Last 10 years Infra index has given 35% return v/s Nifty 50 has given 178% returns
• During the previous capex cycle between 2004-07 Nifty Infra index was a significant outperformer, gaining 475%
Source: Bloomberg, Ace equity 12
• Post disruption of GST and Demonetization, over the last couple of years there is renewed focus on infrastructure growth
• NDA government was always pro growth, what is different this time is government has cleared the bottlenecks and has a
clear funding plan in place which should ensure execution pickup
• Thanks to various govt initiatives like PLI, protection duties & taxation, Private capex too is looking up
• Sector prospects are looking up and there is valuation comfort given the underperformance of the sector over the last 4
years, hence the Build India theme opportunity
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Nifty Infra Index Performance
Key Contributors
➢ Domestic demand driven economy, less dependent on global growth
➢ Large and growing middle class, increased consumption demand.
➢ Favorable demographics – more than 65% population below 35 years of age, under penetration growth opportunity.
➢ Strong credit mechanism through a well-regulated banking and financial sector
➢ High savings rate
➢ Healthy capital inflows helping investments in industry and infrastructure
➢ A pragmatic government with focus on policy reforms and growth impetus
Source: Motilal Oswal Securities Limited, Data as on 30/04/2021, Wikipedia
India has grown at an average of 6.2% for last 33 years with no negative annual growth. Low impact of Covid -19 on economy, consumption helpedto gain V shape recovery in FY21. If the crisis doesn’t materially escalate, FY22 could see double digit growth.
37 62 18
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India GDP (USD bn)
Ist USD Trn 58
2nd USD Trn 7 yrs
3rd USD Trn 6 yrs
4th USD Trn 3 yrs
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INDIA MACRO: INDIA GROWTH OPPORTUNITY
GOVT SPENDING ON INFRA INVESTMENT TO BE 2X (FY20-25)
~INR 57 lakhs Crores ~INR 111 lakhs Crores
Source: Source: Report of the Task Force Department of Economic Affairs Ministry of Finance Government of India-Volume I.
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• The National Infrastructure Pipeline (NIP) is government’s effort to augment India's infrastructure through an identifiedinvestment of INR 111 Lakh crores between FY 2020-2025 doubled from FY 2013-2019
• Sectors such as energy, roads, urban and railways amount to ~71% of the projected infrastructure investments in India.
WHAT WILL HELP CAPITAL SPENDING
15Source: Spark Research, NMP Report
Ample Liquidity in the banking system to fund growth and keep the interest rates low
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Interest rates are low (3 year G-sec %)
882
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2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
While total credit growth is moderate, there is a pick up in credit growthin pockets like Housing, Road & SME
Absolute (Rs. tn) Incremental credit Growth
Mar-20 Apr-21 Rs. bn YoY
Personal Loan 25.5 28.1 2,568 12.60%
Housing 13.4 14.6 1,225 9.50%
Credit Card 1.1 1.1 55 17.10%
Vehicle Loan 2.2 2.4 218 11.70%
Other Personal 7.3 7.9 592 17.80%
Roads infra 1.9 2.4 485 35.50%
SME 1.1 1.4 375 43.80%
Total 103.7 108.6 4,896 5.70%
Make in India initiatives from GOI and global sourcing moving to "China+1" model has resulted in better demand. India has a strong chance to usher a meaningful private sector capex in manufacturing and infrastructure to capture the economy.
PLI Scheme: GOI approved the production-linked incentive (PLI) scheme for 10 key sectors to boost local manufacturing that could add USD 520 billion to the GDP in the next five years.
Corporate Tax Rate: To encourage ‘Make in India’ policy, corporate tax rate was reduced from 25% to 15% for new manufacturing firms to make it competitive across Asian Countries.
Reforms: Indian government has brought various reforms in Farm bill, Land and Labour for ease of doing business.
Disinvestment: The govt of India has announced divestments and privatization of select public sector companies and financial institutions to bring efficiency, raise resources and contain fiscal deficit.
Focus on Growth: Government of India has in the Union Budget has announced fiscal stimulus measures to help economy survive the Covid impact.
GOVT’S PROACTIVE STEPS : BUILDING BLOCKS IN LAST 2-3 YEARS
16Source: https://in.pinterest.com/
PLI TO BE A CATALYST FOR PRIVATE SECTOR INVESTMENTS
CategoryOverall PLI Incentive committed (Rs. Bn)
Committed/Likely Investment/Capex (Rs. Bn)
Mobiles 410 110
Pharma 150 100
Pharma – API/KSM 63 54
Pharma - Medical Devices 28 9
White Goods & LED 62 79
Solar PV 45 175
Telecom 122 30
Food 109 61
Automobile & Auto Components
570 400
IT Hardware 50 24
Speciality Steel 63 150
Textile 107 100
EV Battery 181 80
Total 1,960 1,371
• PLI likely to lead to capex of ~Rs.1.4tn over
the next 2-3 years
• It will reduce the dependence on imports
which is to the tune of ~Rs. 5tn (USD 70bn)
currently across 13 sectors.
• We believe PLI could fast track the capex
plans from the private sector at-least by two
years.
17Source: Sector PLI Gazette Notification, Spark Research
WHY CAPITAL SPENDING LOOKS POSITIVE
18Source: NHAI, NIP Report, Spark Research
1435
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4344 4335
7396
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Road Projects Awarded by NHAI (in kms)
Overall 68000 kms road to be constructed with total outlay of INR~19.6 lakh crore over FY20-25
The total amount to be spent through NIP in Railway Sector from FY20– FY25 will be INR ~14 lakh crore
Airports – (Project Summary)
ParticularsNo. of
projectsCapex over FY20-
FY25 (INR Bn)
Completely Greenfield Projects 8 361
Expansion and modernization existing airports
50 530
Total 58 892
3
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FY21 FY26
Data Center Industry ($, bn)
Data Center spend is expected to reach $8bn in FY26E from $3bn inFY21, 22% CAGR
KEY HEAVY INDUSTRIES TREND
Power demand might continue at 6-7% CAGR due to 3x increase inCaptive power capacity (Total Capex from FY22-24E –~ Rs. 2.7Lakh Crore)
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Power sector capex to be led by renewables
Captive Power (MW) Power Demand CAGR during this period
84% 86%
67% 68%78%
67%76%
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Cement Sector Total Capacity & Utilisation
Total Capacities (mt) Cap Utilisation
91% 88% 81%77% 71%
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Steel Sector Total Capacity & Utilisations
Total Capacities Utilisation
Total Capex from FY22-24E – Rs. ~450bn; Cement sector capacity announcements in the next three years: 75mt
Total Capex from FY22-24E – Rs. ~1tn; Steel sector capacity announcements in the next three years: 25-30mt
Refineries Project FY22-FY25ETotal Target Capex
(Rs Bn)
Barmer refinery 430
Nagapattinam + Gujarat + Panipat 880
Numaligarh Refinery 220
Petchem 110
Development Capex 900
Pipeline capex 300
Marketing capex 400
Bio refineries capex 250
Total 3,490
Refinery capex should accelerate significantly
19Source: Spark Research Report,
20Source: Spark Research, Investec Securities research
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Share of new private project announcement showing initial signs of green shoots
PRIVATE CAPEX LOOKS UP
2257
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FY19 peak order awarding to be outpaced in Fy22 and momentum toaccelerate.
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Housing Inventory in years
Inventory months in Tier-1 (top 7 cities)Inventory months in Tier-2 (top 7 cities)
Housing inventory has fallen to the lowest level in recent years inboth Tier 1 and Tier 2 cities
Manufacturing Sector New project announcements grew by42% q-o-q to Rs. 2.7tn in Q1 FY22, 26% on a 2Y CAGR basis
GLOBAL CAPEX TRENDS ON THE RISE DRIVEN BY STIMULUS
2,300
1,090
496
384
170
USA
Japan
UK
Germany
China
Developed Countries - COVID Stimulus Package(USD bn) Stimulus checks, extended unemployment programs, Education, Government, small
business, expanded tax credits, Agriculture, Transportation, Health
Cash pay-outs to households and small businesses, For deferred social security and tax payments
Employment-related measures, Tax measures – Direct and Indirect, Self-Employment Income Support Scheme, Business Interruption Loan Scheme, Local Restrictions Support Grant
Financial support for families and employees, Liquidity and stabilization assistance for companies, social security support, financing for modernizing the German economy
Employment-related measures, Economic stimulus measures, Custom Measures -Export of medical supplies, Customs clearance, Duty relief, Deferred tax payments
Stimulus Package Measures
21Source: Whitehouse.gov, Spark Research
22
MAPPING THE OPPORTUNITIES
Opportunities
Government Capex → Leading from the front
Private Capex → should see traction over 5 years
Digital Infra → India to move
towards a digital economy
Global Capex → Driven by Stimulus and strong Balance Sheet
Spending led by → liquidity, low interest cost and lean Balance Sheet
Ancillaries
Beneficiaries
EPC, Heavy Industries, Engineering cos
Cap Goods, Engineering cos
Fintech, Ecommerce, OTT sectors
Metal, Steel, Engineering Exports Cos
Corporate Lenders
Real Estate, Building products, Support Cos (Exchanges)
HOW ARE WE GOING TO CAPTURE THESE OPPORTUNITIES
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• Total number of listed companies - 44
• Total market cap of EPC companies – Rs. 1,12,305 CrEPC
• Total number of listed companies - 46
• Total market cap of Cap Goods companies Rs. 5,23,076 Cr.CAP GOODS
• Total number of listed companies 22
• Total market cap of Asset Owners companies Rs. 5,93,995 Cr.ASSET OWNERS
• Total number of Listed companies – 34
• Total market cap of Cap Goods companies Rs. 29,35,874 CrFINANCIERS
• Total number of listed companies 53
• Total market cap of listed Support companies Rs. 1,72,417 Cr.SUPPORT COS
Source: Ace Equity, Mcap as on 09/09/2021
• Globally high and cheap liquidity will stay for long is a consensus view
• Inflation risks can creep in forcing central banks to revisit their monetary stance
• Rising commodity and other costs are a risk to corporate profitability and can impact earnings growth
• 3rd wave of medical emergency
• Re-emergence of global trade or currency war
• High Beta Sector, ONLY FOR HIGH RISK/AGGRESIVE INVESTORS
KEY MARKET RISKS
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RISK FACTORS
• Company risk: The performance of the model portfolio will depend upon the business performance of the Portfolio Entity and its
future prospects. Investment Advisors focus on studying the business sustainability and studying the balance sheet will help in
mitigating these sector or company risks.
• Valuation risk: Investment Advisor will assess the Portfolio entities from varied valuation parameters in order to establish whether
the valuations are reasonable while creating the model portfolio and reassess the same from time to time.
• Market risk: Investment Advisor endeavours to create a portfolio of companies using bottom-up fundamental research rather than
trying to time the markets. However, the Investment Advisor will monitor the market and economic circumstances from time to
time that may affect the performance of the Portfolio entities.
• Sector concentrated Risk: Portfolio is concentration to few sectors and hence carries higher risk and not suitable for risk averse
investors
• Liquidity risk: While investing in equities and Portfolio Entities, liquidity constraints are potential near-term risk while investing and
disinvesting the Portfolio entities. The Investment Advisor endeavours to mitigate the risks by creating a diversified portfolio with a
medium to long term time horizon.
• Other risks: The advisory portfolio offered by the Investment Advisor is suitable for clients with “Aggressive”/ “High Risk” risk
profile. The Investment Advisory does not offer any assured / guaranteed returns. Investments in securities is subject to market risk.
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DISCLOSURES AND DISCLAIMERS
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This Key Information and Disclosure Document has been prepared inter-alia in pursuant to regulation 18 of the Securities and Exchange Board of India (Investment Advisers) Regulations, 2013, as amended from
time to time (the Regulations) and the Circulars, Guidelines and instructions issued by SEBI thereunder from time to time. This document is intended only for the personal use of the prospective investors to whom
it is addressed or delivered and must not be reproduced or redistributed in any form to any other person without prior written consent of Abakkus Asset Manager LLP (the “Investment Advisor”). This document
does not purport to be all-inclusive / comprehensive, nor does it contain all the information which a prospective investor may desire for making decisions for engaging the Investment Advisor.
History, Present Business and Background
Abakkus Asset Manager LLP (‘Abakkus’) is a SEBI registered Portfolio Manager and Investment Advisor and offers portfolio management and advisory services to clients vide SEBI registration No. INP0006457 and
INA000015729 respectively and is also the Investment Manager of Abakkus Growth Fund, a SEBI registered Category III Alternative Investment Fund (AIF) vide SEBI registration No.IN/AIF3/18-19/0550.
Partners Name: (i) Mr. Sunil Singhania
Sunil Singhania, CFA, is the Founder of Abakkus Asset Management, LLP, an India-focused Asset Management Company established in 2018. Prior to this, in his role as Global Head – Equities at Reliance Capital
Ltd., he oversaw equity assets and provided strategic inputs across Reliance Capital Group of companies including asset management, insurance, AIF and offshore assets. And as CIO – Equities, Singhania led
Reliance Mutual Fund (now Nippon India Mutual Fund) equity schemes. Reliance Growth Fund (now Nippon India Growth Fund) grew over 100 times in less than 22 years under Singhania’s leadership.
Furthermore, he led Reliance Nippon Life Asset Management Ltd.’s (now Nippon Life India Asset Management) international efforts and was instrumental in launching India funds in Japan, South Korea, and the
UK, besides managing mandates from institutional investors based in the US, Singapore, and other countries. He is currently appointed on the IFRS Capital Market Advisory Committee. (2020-2023). He was the
Promoter of The Association of NSE Members of India; a body of stockbrokers. He served on the Global board of CFA Institute, USA (2013-2019) and as Chairman of the Investment Committee (2017-2019) of the
CFA Institute, USA. He also sat on CFA Institute’s Standards of Practice Council for six years and was the Founder of the Indian Association of Investment Professionals (now CFA Society India) and served as its
President for eight years. He is a CA rankholder and a CFA charterholder and graduated in commerce from the Mumbai University.
(ii) Abakkus Expert Professionals Private Limited: Abakkus Expert Professionals Private Limited is a Private Company, incorporated on 20 February 2018 in Mumbai under the Companies Act,2013. Its main objects
are to act as financial consultants, management consultants, and provide advice, services, consultancy in various fields viz. general, administrative, secretarial, commercial, financial, and legal. Abakkus Expert is
registered with PFRDA as Retirement Advisor.
Affiliation with other intermediaries
There are no affiliations with other intermediaries except that Abakkus has empanelled various financial intermediaries and / or financial institutions and / or individuals for promoting / distributing its various
financial product offerings including availing theirs advisory / distribution / on-boarding platform(s).
Disciplinary History / Complaint Status
(i) No penalties / directions have been issued by SEBI under the SEBI Act or Regulations made there under against Abakkus or its Partners, or employees relating to Investment Advisory services.
(ii) There are no pending material litigations or legal proceedings, findings of inspections or investigations for which action has been taken or initiated by any regulatory authority against the Abakkus or its
Partners, or employees
(iii) For latest update on complaints kindly visit website: www.abakkusinvest.com
DISCLOSURES AND DISCLAIMERS
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Services offered and terms of offerings
(a) The Investment Adviser shall provide investment advice to the Clients relating to investing, purchasing, selling, or dealing in securities or investment products/asset classes such as shares, debentures, bonds,derivatives, securities instruments, structured products, units of MF/AIF/REIT/InvIT/ETF/PMS, private equity, alternative asset class such as real estate, commodities, angel investment, offshore investment etc.
(b) The Investment Adviser provides advice on investment portfolio containing or any other investment product suitable to the Client’s needs and on-going monitoring, periodic review, asset allocation and financialplanning including analysis of Clients’ financial position, identification of its financial goals and developing and recommending financial strategies to realise such goals.
(c) Investment Adviser undertakes that all such Investment Advisor services shall be offered to the client with no binding whatsoever and client shall be free to implement or execute the services with anydistributor/broker/intermediary of his/her/its choice.
(d) The performance related information stated by the Investment Adviser will be on a consolidated basis which would neither be verified nor approved by SEBI. The performance / returns of the stock acrossadvised individual portfolios may vary significantly from the data depicted by the Investment Adviser. No claims may be made or entertained for any variances between the performance depictions and that of thestock within individual client portfolios. Neither the Investment Adviser, nor its Partners, employees, affiliates shall in any way be liable for any variation noticed in the returns of individual portfolios. Performanceof Abakkus shall have no bearing on the expected performance of an Individual Client Portfolio. Abakkus also does not guarantee or assure any minimum or risk free returns. Past performance of the financialproducts, instruments and the portfolio may or may not be sustained in future and should not be used as a basis for comparison with other investments.
Risk Factors
The value of the investments and the expected returns may be affected generally by factors affecting financial and securities markets, such as price and volume, volatility in interest rates, currency exchange rates,
changes in regulatory and administrative policies of the Government or any other appropriate authority (including tax laws) or other political, economic, and other developments as detailed below:
Portfolio Entities/ Companies Risk: The performance of the model portfolio will depend upon the business performance of the Portfolio Entities and Companies and its prospects. Investment Advisor focuses on
studying the business and the sustainability with focus on studying the balance sheet will help the Investment Advisor in mitigating these sector or company risks.
Valuation Risk: Investment Advisor will assess the Portfolio Entities from varied valuation parameters in order to establish whether the valuations are reasonable while creating the model portfolio and reassess the
same from time to time.
Market Risk: Investment Advisor endeavours to create a portfolio of Entities /Companies using bottom-up fundamental research rather than trying to time the markets. However, in order to mitigate Market Risk,
the Investment Advisor will monitor and analyse the market and economic circumstances from time to time that may affect the performance of the Portfolio Entities.
Liquidity Risk: While investing in equities and Portfolio Entities, liquidity constraints are potential near-term risk while investing and disinvesting the Portfolio Entities. The Investment Advisor endeavours to
mitigate the risks by investing creating a portfolio with a medium to long term time horizon.
Other Risks: The advisory portfolio offered by the Investment Advisor is suitable for clients with “Aggressive”/ “High Risk” risk profile. The Investment Advisory does not offer any assured / guaranteed returns.
Investments in securities is subject to market risk. Please read the Key Information and Disclosure Document carefully before investing.
The Investment Adviser shall not be liable or responsible for any loss or shortfall resulting on account of Non-Discretionary Investment Advice. The views represented by Investment Adviser should not be taken as
the basis for an investment decision.
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Holdings and Disclosure of Interest
Abakkus or its affiliates or employees/partners or funds advised/managed by Abakkus may have same or contra positions in personal or fiduciary capacity the above securities/stocks. Investors should take caution
while executing the advice based on their risk/return profile and suitability.
Conflict of Interest
(i) Client understands that subject to the applicable laws, Abakkus may give advice or take action in performing its duties to other clients, or for its own accounts, that may or may not differ from advice given to or
acts taken for the Client. Abakkus is not obligated to recommend to the Client, any security or other investment that Abakkus may buy, sell, or recommend for any other client or for its own accounts.
(ii) Abakkus or its affiliates may be involved in other financial, investment or other professional activities which may on occasion cause conflicts of interest with the investment advisory services being provided to
the Client. These include serving as directors, officers, advisers, or agents of other companies.
(iii) In addition to the investment advisory services, the Client may also choose to avail any other services inter-alia related to Portfolio Management Services/Alternative Investment Fund Services as may be
provided by its affiliates or through its separate division(s)/entities. The Parties may have to accordingly govern themselves by the terms and conditions as may be laid down or applicable in case of the
aforementioned activities subject to the following:
• As an entity: Abakkus, for its own proprietary purposes may invest / divest in various securities / investments, from time to time at its own discretion which will be undertaken by a separate and dedicated
team. The said segregation will ensure avoidance of conflict of interest with regard to the investment advisory and related business of the Company. Such proprietary investment transactions may at times
be contrary to the investment advice or other related business or actions inter-alia due to reasons such as different risk profile, returns expectation, investment objective or risk perception of the entity
being advised
• As its business activities: Apart from providing investment advisory services through its separately identifiable division/entity called Abakkus Investment Advisor under Abakkus Smart Brand, Abakkus is also
engaged in providing various financial services and in connection with any advice on securities or investment products so serviced, Abakkus may earn fees or remuneration in form of management fees or
any other fees by whatever name called.
• As its Partners or employees: Abakkus, its partners or employees may also advice or be connected with any fund house, portfolio manager, mutual fund/asset management company, alternative investment
funds, broking company or any other entity or its partners or employees offering any financial product (which may be part of investment advice) or undertake any execution services and accordingly they
may earn management fees, for the same.
• Future business activity: During the course of business, as part of normal business activity, Abakkus, its partners or its affiliates may undertake any other business or register with SEBI or any other regulator
or body for conducting business activities that may be directly or indirectly connected with its long-term business objectives in line with its Object Clause inter alia including corporate advisory etc.
However, the Client shall not be under any obligation to avail the execution, or any other such services offered by Abakkus Smart or Abakkus Investment Advisors, the division of Abakkus or affiliate of Abakkus. All
fees and charges, wherever applicable, for such services shall be paid directly to execution service providers and not through the Investment Advisor.
DISCLOSURES AND DISCLAIMERS
29
Other Disclosures
The information shared by the Investment Adviser from time to time should not be construed as any form of advice, recommendation, or suggestion, to buy or sell any securities or financial instruments or avail any
services to any individual or entity. Investment Adviser shall not be responsible for the loss or damage (financial or otherwise) caused due to incorrect, inaccurate, or erroneous information, details or data stated in the
document(s).
Abakkus retains all the rights in relation to all information contained in the document(s) shared from time to time.
Abakkus operates from within India and is subject to Indian laws and any dispute shall be resolved in the courts of Mumbai, Maharashtra only.
Abakkus declare that the data and analysis provided shall be for informational purposes. The information contained in the analysis shall been obtained from various sources and reasonable care would be taken to
ensure sources of data to be accurate and reliable. Abakkus will not be responsible for any error or omission in the data or for any losses suffered on account of information contained in the analysis. While Abakkus will
take due care to ensure that all information provided is accurate however Abakkus neither guarantees/warrants the sequence, accuracy, completeness, or timeliness of the report. Neither Abakkus nor its affiliates or
their partners, directors, employees, agents, or representatives, shall be responsible or liable in any manner, directly or indirectly, for views or opinions expressed in this analysis or the contents or any systemic errors
or discrepancies or for any decisions or actions taken in reliance on the analysis. Abakkus does not take any responsibility for any clerical, computational, systemic, or other errors in comparison analysis.
The Investment Advisor warrants that the contents of this Key Information and Disclosure Ddocument are true to the best of the knowledge, belief, and information of the Partners of Abakkus , however, assume no
liability for the relevance, accuracy, or completeness of the contents herein.
The Investment Advisors (including its affiliates) and any of its Partners , officers, employees, and other personnel will not accept any liability, loss, damage of any nature, including but not limited to direct, indirect,
punitive, special, exemplary, consequential, as also any loss of profit in any way arising from the use of this document in any manner whatsoever.
This document may include certain forward-looking statements which contain words or phrases such as “believe”, “expect”, “anticipate”, “estimate”, “intend”, “plan”, “objective”, “goal”, “project”, "endeavor" and
similar expressions or variations of such expressions that are forward-looking statements. Actual results may differ materially from those suggested by the forward-looking statements due to risks, uncertainties, or
assumptions. Abakkus takes no responsibility of updating any data/information.
This document cannot be copied, reproduced, in whole or in part or otherwise distributed without prior written approval of the Investment Advisor.
Abakkus Investment Advisors or Portfolio Manager (including its affiliates) may offer services in nature of advisory, consultancy, sponsorship of funds, investment management of funds including category III AIF under
SEBI registration number IN/AIF3/18-19/0550 for Abakkus Growth Fund and all its schemes, etc., which may be in conflict with the activities of portfolio management services.
Prospective clients are advised to review this document, Advisory Agreement, presentation(s), and other related documents carefully and in its entirety. Prospective clients should make an independent assessment,
and consult their own counsel, business/investment advisor and tax advisor as to legal, business and tax related matters concerning this document, the Advisory Agreement, and the other related documents before
becoming interested in the Advisory Portfolio.
Tenure or investment horizon of typically investments advisory portfolio will have a medium to long term time horizon of 3-5 years. The Investment Advisor may, at its discretion if it deems fit, advise any Portfolio
Investment beyond 5 years. The risks disclosed may affect portfolio performance.
The information contained in this document has been prepared for general guidance and does not constitute a professional advice /assurance and no person should act upon any information contained herein without obtaining specific professional advice/Assurance. Neither the Investment Advisor nor its Affiliates or advisors would be held responsible for any reliance placed on the content of this document or for any decision based on it. Each existing / prospective client , by accepting delivery of this document agrees to the foregoing. The Investment portfolio are subject to several risk factors including but not limited to political, legal, social, economic, and overall market risks. The recipient alone shall be fully responsible/are liable for any decision taken on the basis of this document. The Investment Advisor is also registered with SEBI as a Portfolio Manager and Investment Manager to SEBI registered Category III Alternative Investment Fund. Abakkus, its partners employees, PMS clients and AIF scheme may have existing exposure to the stocks that form part of the investment advisory portfolio. Further, in view of the investment objective and strategy of the PMS clients and AIF scheme there may be situations where Abakkus may be selling a stock which is part of the advisory portfolio.
DISCLOSURES AND DISCLAIMERS
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The advisory portfolio offered by the Investment Advisor is suitable for clients with “Aggressive”/ “High Risk” risk profile. The Investment Advisory does not offer any assured / guaranteed returns. Investments in
securities is subject to market risk.
The information can be no assurance that future results or events will be consistent with this information. Any decision or action taken by the recipient based on this information shall be solely and entirely at the risk of
the recipient. The distribution of this information in some jurisdictions may be restricted and/or prohibited by law, and persons into whose possession this information comes should inform themselves about such
restriction and/or prohibition and observe any such restrictions and/or prohibition. Unauthorized disclosure, use, dissemination or copying (either whole or partial) of this information, is prohibited. Abakkus will not
treat recipient/user as customer by virtue of their receiving/using this report. Neither Abakkus nor its affiliates, directors, partners, employees, agents, or representatives, shall be responsible or liable in any manner,
directly or indirectly, for the contents or any errors or discrepancies herein or for any decisions or actions taken in reliance on the information. The person accessing this information specifically agrees to exempt
Abakkus or any of its affiliates or employees from, any and all responsibility/liability arising from such misuse and agrees not to hold Abakkus or any of its affiliates or employees responsible for any such misuse and
further agrees to hold Abakkus or any of its affiliates or employees free and harmless from all losses, costs, damages, expenses that may be suffered by the person accessing this information due to any errors and
delays.
Contact Us:
Website: www.abakkusinvest.com |Email: [email protected] | Tel: 022-68846600
Corporate and Registered Address:
Abakkus Corporate Center, 6th Floor, Param House, Shanti Nagar, Near Grand Hyatt, Off Santacruz Chembur Link Road, Santacruz East, Mumbai – 400055 LLPIN: AAM-2364; RIA Registration SEBI Number:
INA000015729
Principal Officer/Compliance Officer Details
Biharilal Deora , Phone no. +91 22 6884 6604,
For Queries / Grievances
Email – [email protected]; [email protected]