Equitree Emerging Opportunities


Key Portfolio Attributes

Inception Date: 3rd Oct 2017

Number of Stocks: 12-15

Portfolio Manager’s Name: Pawan Bharaddia and Ssuneet Kabra

Portfolio Manager’s Experience: Both have 25+ years of experience each

Portfolio Manager’s Qualification: Both are Chartered Accountants (C.A.)

Product Story

Equitree is all about going where the crowd isn’t looking—and staying there until the magic happens. It’s run by two seasoned professionals who bring a solid blend of private equity discipline and public market insight.

Pawan Bharaddia, the lead fund manager, is a Chartered Accountant with over 25 years in both private equity and public markets. What makes him stand out is how he blends PE-style deep research with public market investing. He’s known for spotting multibaggers way before they hit anyone’s radar. And the numbers back that up. On the other hand, you’ve got Ssuneet Kabra, also a CA, who handles the business side as CEO. With another 25 years of experience in financial advisory, he’s the one building relationships, guiding clients, and expanding the firm’s investor base. His style? Let’s just call it “uncommon common sense”—a phrase that perfectly sums up how he thinks and invests.

Now coming to how they operate. The philosophy is super clear: take high-conviction bets, go concentrated, and play the long-term game. They usually hold around 12–15 stocks at a time, all small or micro-cap businesses that are deeply undervalued but show strong growth potential. The idea is to enter before the institutions, before the media noise—when no one’s really watching. They do intense on-ground research, evaluate promoters closely, and once they’re convinced, they hold these businesses for 3 to 5 years or more. Why? Because that’s where compounding really starts to kick in, and the longer holding period also brings in tax efficiency.

Their investment style is a mix of deep value and high growth. They’re looking at companies trading well below their 10-year average valuations, with PEG ratios under 1. It’s a classic value-meets-growth strategy—but executed in places most investors don’t even think to look. And they take sizable stakes too—often buying 3–5% of the company. Some of their past bets speak for themselves: Shakti Pumps went 50X, HBL Power 13X, and Stylam hit 25X. These aren’t just good calls—they’re the kind of returns that change portfolios.

This is a pure small-cap and micro-cap play. So yes, it’s more suited to risk-aggressive investors who are comfortable staying invested through volatility. But the reward potential, if you stay patient, is pretty compelling.

And here’s an interesting twist—their performance fee isn’t charged annually like most others. They only charge it if the portfolio doubles or after 5 years. So they’re not just aligned with your gains—they’re fully committed to that long-term compounding mindset.

Minimum investment is ₹1 crore. This isn’t a volume play for them. It’s about working with investors who understand and buy into the same vision.

Investment Objective

The primary objective of the Equitree Capital’s Emerging Opportunities PMS is to generate significant capital appreciation over the long term by investing in a focused portfolio of Indian small and micro-cap listed companies.

The PMS aims to achieve a 25-30% Compound Annual Growth Rate (CAGR) in earnings for its portfolio companies, aiming for substantial wealth creation for investors.

The strategy emphasizes a buy-and-hold approach with a 3-5 year investment horizon, intending to leverage the power of compounding and tax efficiency.

The key focus is on identifying and investing in businesses with high growth potential and sound fundamentals.

Investment Strategy

The Equitree Capital’s Emerging Opportunities PMS follows a structured investment process that includes: Idea Generation, Deep Research, Portfolio Construction, Continuous Monitoring, and Exit Strategy.

  • Idea Generation: This begins with quantitative screenings and networking within the industry to identify potential investment opportunities.
  • Deep Research: The team conducts thorough due diligence including analyzing business fundamentals, financial statements, management meetings, soft diligence on promoters’ background, and plant visits.
  • Portfolio Construction: The portfolio typically starts with a 2-3% position in a stock and increases based on business execution. It is a concentrated portfolio of around 12-15 stocks for diversification.
  • Continuous Monitoring: The portfolio is monitored regularly by evaluating risk factors, including valuations, changes in promoter holdings, exposure limits, liquidity, business developments, and macro trends.
  • Exit Strategy: Positions are reduced when valuations are considered inflated, or when a stock exceeds its intrinsic value. This frees up capital to reinvest in better opportunities.

The investment strategy prioritizes long-term value creation while minimizing portfolio turnover. Equitree is a focussed, concentrated investment approach, similar to a PIPE (Private Investment in Public Equity) fund.

The PMS follows a “private equity” approach to public markets, i.e., the PMS focuses on identifying investment opportunities before they are widely recognised by major institutional investors.

Investment Philosophy

Equitree Capital’s investment philosophy for its Emerging Opportunities PMS revolves around three core pillars: Strategic Business Focus, Valuation-Driven Investing, and Management Expertise.

  • Strategic Business Focus: The PMS invests in businesses that are easily understood, focusing on companies that are at an “inflection point” (like capacity expansion or new product launches), and prioritizing market leaders with a sustainable competitive advantage (“MOAT”). It avoids new-age companies that have been listed in the last 5-10 years.
  • Valuation-Driven Investing: The approach emphasizes deep value investing in high-growth companies that are mispriced or where there are hidden opportunities. The team focuses on companies trading below their historical 10-year valuation and looks for a low Price-to-Earnings Growth (PEG) ratio (below 1). It values investments on present worth, not swayed by future promises.
  • Management Expertise: The PMS seeks out family-run businesses with proven leadership and a strong management track record. The strategy includes companies with decades of operating history, robust free cash flow, high promoter holding (while avoiding pledged holdings), and regular interaction with management.

Private Equity Approach

Equitree Capital’s Emerging Opportunities PMS distinguishes itself by adopting a “private equity approach” within the public markets. This strategy combines the benefits of public market liquidity with the rigor and focus of private equity investing. Here are the key elements of this approach:

    • Early Identification: Equitree leverages its extensive industry network and proprietary screening tools to identify promising investment opportunities before they gain significant attention from major institutional investors or media coverage. This proactive approach allows them to potentially secure investments at more attractive valuations.
    • Valuation Focus: The PMS emphasizes long-term value creation over short-term market trends. They actively minimize portfolio turnover, unless valuations become unsustainable. When this occurs, they adjust positions to secure profits.
    • 360° Research: Equitree conducts comprehensive due diligence on each investment, including on-the-ground research of the business. This deep dive includes continuous monitoring of the entire value chain, ensuring a complete understanding of the company and its ecosystem.
    • Long-Term Approach: They make high-conviction bets in a concentrated portfolio, focusing on a limited number of companies they know well. The strategy involves taking advantage of short-term market volatility to acquire or add to positions at attractive valuations.
    • Proactive Value Enhancement: Equitree provides strategic advice and guidance to the management of its portfolio companies. This includes helping them unlock long-term value by improving corporate communication and by sharing an outside perspective on industry trends.
    • Client-Centric Focus: Equitree’s performance fees are only charged when the portfolio doubles in value or in 5 years, incentivizing long-term value creation. They provide regular investor communication which includes valuable market and portfolio insights to keep clients well-informed and engaged.

Key Takeaways of Equitree’s Private Equity Approach:

    • Combining Public and Private: The approach blends public market investing with private equity principles for an ideal investment strategy.
    • Proactive and Hands-on: Equitree doesn’t just invest; it actively participates in the value creation journey of its portfolio companies.
    • Focus on Quality: The focus is on identifying quality businesses with the potential for long-term value creation.
    • Long-Term Value: Emphasizes long-term growth over short-term gains, with a focus on wealth generation.

Performance Table #


Trailing Returns (%) 1m return 3m return 6m return 1y return 2y return 3y return 5y return 10y return Since inception return
Equitree Capital Advisors Emerging Opportunities -2.61%-10.06%-7.92%17.39%50.67%31.74%45.72%NA%7.70%
BSE 500 TRI3.18%2.15%-2.77%5.70%21.03%15.15%23.67%NA%14.49%

QRC Report Card *




VIEW DETAILED QUALITY, RISK, CONSISTENCY ANALYSIS

Portfolio Holdings


Holding %

Sector Allocation


Holding %

Market Cap Allocation


Allocations %
Large Cap 1.52
Mid Cap 0.14
Small Cap 83.50
Cash 14.84

Do Not Simply Invest, Make Informed Decisions

WISH TO MAKE INFORMED INVESTMENTS FOR LONG TERM WEALTH CREATION

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Disclaimer

#Returns as of 30 Apr 2025. Returns up to 1 Year are absolute, above 1 Year are CAGR.

*QRC Report Card data is updated quarterly. Current data is as of Dec 24.


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