Axis AMC to launch three products this fiscal, eyes Rs 20,000 crore in alternates growth

Fresh updates from the financial markets indicate that Two months after the Axis Securities PMS business was folded into Axis AMC, Naveen Kulkarni gives Moneycontrol a detailed roadmap: a Rs 20,000-crore three-year AUM target, specifics on three product launches this fiscal year (one PMS, two Category-III AIF), and his read on how upcoming SEBI regulations including the Rs 25-lakh MF-only PMS tier will reshape the space Axis is now betting on. Kulkarni is CIO, PMS and Listed Equity Alternates at Alternates by Axis AMC.

The restructuring brings multiple PMS licenses within the group under the AMC, which Kulkarni stated streamlines brand presence and operational infrastructure while giving the Rs 5,000-crore equity portfolio direct access to institutional research, unified execution systems, and centralized compliance. It additionally widens distribution: housing the PMS within an AMC opens up empanelment with third-party wealth managers and private banking platforms that apply different criteria to asset managers than to broking entities. Edited excerpts:

Q: Axis recently consolidated its PMS operations from Axis Securities into Axis AMC. What is the operational and commercial rationale behind this restructuring?

The restructuring consolidates multiple PMS licenses within the group, streamlining brand presence and operational infrastructure. Managing a Rs 5,000-crore equity portfolio within an asset management firm provides direct access to institutional research, unified execution systems, and centralized compliance frameworks.

From a distribution standpoint, housing the PMS within an AMC broadens our reach across third-party wealth managers and private banking platforms. Institutional distributors often have distinct empanelment criteria for asset management firms compared to broking entities. We have initiated empanelment across several major private wealth channels and foreign banks, which opens up additional distribution networks alongside our internal group channels.

Q: What is the current size of your listed alternatives book, and what is your three-year expansion target?

Across equity and debt mandates under the group PMS license, we manage Rs 15,000 crore+ AUM as on July 2026, of which approximately Rs 4,600 crore represents PMS equity strategies. Category-III AIF at present accounts for around Rs 45 crore. Our target is to scale total listed alternatives (combining PMS and AIF strategies) to Rs 20,000 crore over the next three years. As the platform scales, we anticipate the overall asset distribution to be between PMS and AIFs.

Q: What is your product launch pipeline in the alternatives space for this fiscal year?

We have three products scheduled for this year. Potentially, one on the PMS platform and two under the Category-III AIF structure. On the AIF platform, high-conviction small- and mid-cap strategies and closed-ended thematic formats. The Category-III AIF wrapper provides the flexibility to include late-stage unlisted securities and use derivative hedging to manage portfolio volatility. Our objective is to pursue attractive risk-adjusted returns while focusing on portfolio risk management and drawdown control.

Q: How do Non-Discretionary PMS (NDPMS) and bespoke mandates fit alongside your standardized model portfolios?

Institutional family offices and ultra-high-net-worth market participants managing portfolios of Rs 10 crore and above often have broad market exposure through mutual funds and passive vehicles, and use PMS mandates specifically for concentrated value creation for market participants. We manage approximately Rs 355 crore in NDPMS and customized AUM amounts to around Rs 600 crore in customized, bespoke mandates consisting of 10- to 15-stock concentrated portfolios. These bespoke strategies allow us to adjust market-cap exposure, sector weights, and investment styles to specific client mandates. Offering both model portfolios and customized NDPMS solutions allows us to cater to different institutional wealth tiers.

Q: Across your key PMS strategies: Kaizen, Pure Expansion, and Contra, how are portfolios at present allocated?

Our manufacturing-focused strategy, Kaizen (~Rs 500 crore AUM) is fuelled by concentrated mid- and small-cap allocations. On the other hand, our Pure Expansion strategy (~Rs 780 crore AUM) is structured around steady compounding, with the aim to deliver consistent benchmark-aligned performance. Our Contra strategy (~Rs 1,500 crore AUM), which combines value and momentum parameters, has tracked a flatter performance trajectory during the past year as market cycles played out.

According to Axis AMC's official factsheets (as on 31st July 2026), Kaizen delivered a 1-year return of 19.47% against the BSE 500 TRI's 2.98%. Its top holding is Sansera Engineering, at 12.99% of the portfolio. Its top three sectors together account for 82.9% of the strategy. Notably, Acutaas Chemicals (Kaizen's second-largest holding) is at 10.86% and additionally features as the strategy's top detractor over the period, per the factsheet's attribution data.

On a comparitive basis overall, Contra carries a elevated risk profile with a Beta of 1.16 and standard deviation of 14.7%, than 0.99 and 15.0% for Kaizen and 0.93 and 12.2% for Pure Expansion.

Q: What key portfolio adjustments or stock additions have you executed recently?

Recent portfolio activity has focused on identifying opportunities across sectors and firms where we see a favourable risk-reward balance, supported by improving fundamentals and long-term expansion potential. Our portfolio selection stays anchored to bottom-up earnings expansion: we look for businesses with sustainable mid-teens earnings expansion trajectories and reallocate capital accordingly.

Q: How do you approach primary market IPOs versus pre-IPO or unlisted opportunities across your PMS and AIF mandates?

IPO investments are at present not permitted in the PMS portfolio. Historically, that stated, mainboard IPO allocations are generally not a primary focus, as small allotment sizes do not materially impact concentrated portfolios. Additionally, secondary markets tend to provide sufficient liquidity and a longer track record for price discovery. In contrast, Category-III AIFs allow us to evaluate late-stage unlisted and pre-IPO opportunities where an illiquidity discount of roughly 15 to 20% can be captured ahead of public stock-exchange debut. As our AIF capital base grows, structured pre-IPO allocations will form a more active component of those mandates.

Q: SEBI's consultation paper proposes a Rs 25-lakh threshold for mutual-fund-only PMS. How does Axis view this segment?

The proposed Rs 25-lakh mutual-fund-only PMS tier is structured to cater to mostly digital wealth-tech platforms. The framework provides direct-plan cost efficiencies to market participants and enables automated fee collection through the demat cash ledger. Given that fee realizations at a Rs 25-lakh entry point average 25 to 50 basis points, the model is more suited for technology-fuelled, high-volume digital distribution.

Q: How do you view the interaction between newly proposed Specialized Investment Funds (SIFs), Category-III AIFs, and set-income products?

The initial market overlap for SIFs will likely occur with traditional set-income products rather than high-conviction Category-III AIFs. Because SIFs carry mutual fund pass-through tax status, market-neutral or conservative long-short strategies targeting ~10% returns offer an alternative to debt mutual funds and bank deposits on a post-tax basis. Category-III AIFs, while subject to fund-level taxation on derivative income, stay the preferred vehicle for market participants seeking unconstrained leverage, unlisted assets, and concentrated long-only strategies.

Q: What is holding large domestic institutions like LIC back from driving massive volumes into domestic Category-II private credit funds?

The main factor is deployment scale and ticket size. Large domestic institutions typically write Rs 2,000 to Rs 5,000-crore cheques. High-grade corporate borrowers with capital requirements of that magnitude can borrow directly from banks or the bond market at competitive rates. Performing credit funds in India operate in the 14 to 18% yield bracket, which is inherently a mid-market, specialized risk segment with a smaller pool of eligible assets. Absorbing multi-thousand-crore institutional mandates without compromising credit underwriting stays the primary structural challenge for the private debt industry.