According to the company, the open-ended fund will focus on underfollowed segments of the listed market, particularly small-, micro-, and nano-cap companies, which together account for a significant share of listed firms but receive relatively limited institutional coverage.
The strategy is based on the premise that a large portion of capital flows into a narrow set of widely tracked stocks, leaving other segments less efficiently priced.
Market data cited by the firm suggests that a substantial share of high-return stocks over the past decade has emerged from the small-cap space, highlighting the potential for wealth creation in less-researched areas, albeit with higher associated risks.
Arpit Jain, Joint Managing Director and CEO at Arihant Capital Markets, said the fund seeks to identify businesses that are earlier in their growth cycle and may offer valuation opportunities due to lower market attention.
The investment strategy follows a bottom-up approach, focusing on companies with strong fundamentals, scalable business models, and governance standards. It will adopt a core-plus-satellite framework, combining long-term holdings in relatively stable businesses with selective exposure to emerging opportunities such as turnaround situations and event-driven ideas.
The fund plans to deploy capital across a mix of established performers, high-growth emerging firms, turnaround cases, and special situations linked to corporate or regulatory developments.
Hardik Shah, Chief Investment Officer at Arihant Alternate Capital Trust, said the approach emphasises stock selection and long-term scalability over short-term market trends.
The company stated that risk management will be an integral part of the strategy, with diversification and flexible allocation aimed at managing downside risks. However, it also noted that investing beyond the large-cap universe typically involves higher volatility.
The fund is targeted at high-net-worth individuals, family offices, and institutional investors, with a minimum investment requirement of ₹1 crore, in line with regulations set by Securities and Exchange Board of India for Category III AIFs.
