Axis AMC to Launch Three Products This Fiscal, Targets ₹20,000 Crore in Alternates Growth

Axis AMC has laid out a three-year growth plan for its listed alternatives business, two months after the portfolio management operations of Axis Securities were brought under the asset manager. The plan, outlined by Naveen Kulkarni, CIO, PMS and Listed Equity Alternates at Alternates by Axis AMC, has three parts: an AUM target of ₹20,000 crore, three product launches in the current financial year, and a position on the SEBI proposals that will reshape the segment, among them a ₹25-lakh mutual-fund-only PMS tier. 

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The logic of the restructuring 

The move consolidates several PMS licences held across the group into a single entity. A ₹5,000-crore equity portfolio now operates inside an AMC, with direct access to institutional research, a unified execution system and centralised compliance. 

The bigger prize is distribution. Third-party wealth managers and private banking platforms use different empanelment criteria for asset managers than for broking houses. By sitting inside the AMC, the PMS business can reach channels that were previously difficult to access. Empanelment has already started with a number of major private wealth platforms and foreign banks, supplementing the group's own distribution network. 

Current book and the three-year target 

Under the group PMS licence, Axis manages upwards of ₹15,000 crore across equity and debt mandates as of July 2026. PMS equity strategies account for roughly ₹4,600 crore of that. The Category-III AIF book is still small at about ₹45 crore. 

The aim is to grow total listed alternatives, PMS and AIF combined, to ₹20,000 crore over the next three years. As the business scales, assets are expected to be split between the two structures. 

Product pipeline 

Three launches are planned for the year: potentially one PMS product and two Category-III AIFs. The AIF launches will centre on high-conviction small- and mid-cap strategies and closed-ended thematic formats. 

The Category-III structure has been chosen because it permits late-stage unlisted securities in the portfolio and allows derivative hedging to control volatility. The stated objective is to deliver attractive risk-adjusted returns while keeping a tight grip on portfolio risk and drawdowns. 

Bespoke mandates for larger clients 

Institutional family offices and ultra-high-net-worth investors with portfolios of ₹10 crore or more usually hold their broad market exposure through mutual funds and passive vehicles. They use PMS for concentrated positions. Axis manages around ₹355 crore in non-discretionary PMS and about ₹600 crore in customised, bespoke mandates made up of 10 to 15 stocks. These can be adjusted for market-cap exposure, sector weights and investment style according to the client's brief. Offering both standardised model portfolios and customised NDPMS lets the fund house serve different tiers of institutional wealth. 

The three flagship strategies 

Kaizen, a manufacturing-focused strategy with approximately ₹500 crore in assets, runs concentrated mid- and small-cap positions. Pure Growth, at about ₹780 crore, is built for steady compounding with the aim of consistent, benchmark-aligned performance. Contra, at around ₹1,500 crore, combines value and momentum parameters and has followed a flatter trajectory over the past year as market cycles ran their course. 

Axis AMC's factsheets dated July 31, 2026 put Kaizen's one-year return at 19.47%, against 2.98% for the BSE 500 TRI. Its largest holding is Sansera Engineering at 12.99% of the portfolio, and its top three sectors together make up 82.9% of the strategy. Acutaas Chemicals, the second-largest holding at 10.86%, also appears as the strategy's top detractor for the period in the factsheet's attribution data. 

Contra carries the highest risk profile of the three, with a beta of 1.16 and standard deviation of 14.7%. Kaizen records 0.99 and 15.0%, and Pure Growth 0.93 and 12.2%. 

Recent portfolio activity has focused on sectors and companies where the risk-reward balance appears favourable, supported by improving fundamentals and long-term growth potential. Stock selection is anchored in bottom-up earnings analysis, with capital moved towards businesses showing sustainable mid-teens earnings growth. 

IPOs and pre-IPO investing 

IPO investments are not currently permitted in the PMS portfolio. Mainboard IPO allocations have in any case not been a primary focus, since small allotments have little effect on a concentrated portfolio and the secondary market offers adequate liquidity and a longer record for price discovery. 

Category-III AIFs are a different matter. They allow evaluation of late-stage unlisted and pre-IPO opportunities, where an illiquidity discount of roughly 15 to 20% can be captured ahead of listing. As the AIF capital base grows, structured pre-IPO allocations are expected to become a more active part of those mandates. 

Reading the ₹25-lakh PMS proposal 

The mutual-fund-only PMS tier proposed at a ₹25-lakh threshold is seen as a product designed mainly for digital wealth-tech platforms. It offers investors direct-plan cost efficiencies and enables automated fee collection through the demat cash ledger. With fee realisations at a ₹25-lakh entry point averaging 25 to 50 basis points, the model suits technology-driven, high-volume digital distribution. 

SIFs versus Category-III AIFs 

The newly proposed Specialised Investment Funds are expected to overlap first with traditional fixed-income products rather than with high-conviction Category-III AIFs. Because SIFs have mutual fund pass-through tax status, market-neutral or conservative long-short strategies targeting about 10% returns can serve as a post-tax alternative to debt mutual funds and bank deposits. Category-III AIFs, which are taxed at fund level on derivative income, remain the preferred route for investors seeking unconstrained leverage, unlisted assets and concentrated long-only strategies. 

Why domestic institutions hold back from private credit 

The main constraint on large domestic institutions such as LIC committing heavily to Category-II private credit funds is deployment scale and ticket size. These institutions typically write cheques of ₹2,000 to ₹5,000 crore. High-grade corporate borrowers with needs of that size can raise money directly from banks or the bond market at competitive rates. Performing credit funds in India operate in the 14 to 18% yield range, which is by nature a mid-market, specialised risk segment with a limited pool of eligible assets. Absorbing multi-thousand-crore institutional mandates without weakening credit underwriting remains the private debt industry's principal structural challenge. 

Disclaimer: Past performance may or may not be sustained in the future and is not indicative of future results. The views expressed above are based on current market conditions and are purely indicative and illustrative in nature. They do not constitute investment advice, an offer, invitation, or solicitation to invest in any financial product or security.