Ambit taps Japan’s appetite for Indian small caps with new fund #JapanFinance

Ambit has announced the launch of a new investment fund specifically for Japanese retail investors, focusing on small-cap companies in India. The newly introduced Daiwa Ambit India Smallcap Stock Fund will invest exclusively in the Ambit Ascension Fund, based in Gujarat International Finance Tech (GIFT) city, and will feature a portfolio of around 50 small-cap companies.

Sushant Bhansali, CEO of Ambit Asset Management, said the recently-concluded New Fund Offering (NFO) is an open-ended offering. The capital was received on February 1, and investments have since commenced.

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Ashok Wadhwa, Group CEO of Ambit, acknowledged concerns about the market environment during the fund’s launch in Tokyo, as Indian small- and mid-cap stocks faced a sharp correction. However, he believes this downturn presented a better entry point.

Japanese retail investors continue to believe in the India story. The fact that Daiwa successfully raised funds in such a short time highlights the strong capital interest in India, particularly amid this market correction, Wadhwa noted.

Wadhwa highlighted Ambit’s performance, stating that their small-cap investments have delivered over 15% returns in the past five years.

He also pointed out that Japanese investors, accustomed to near-zero returns in their domestic markets, see India as an attractive opportunity.

Previously, concerns around ease of investment and liquidity in India acted as barriers. However, in the last three years, these challenges have been largely addressed. The strong political relationship between India and Japan has provided further confidence to investors, Wadhwa explained.

Bhansali elaborated on the portfolio composition, noting that small-cap investing differs from midcap and largecap strategies, which traditionally include banking, IT services, and large pharmaceutical firms.

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Instead, the focus of this fund will be on sectors such as domestic consumption, export-oriented manufacturing, staffing services, capital goods, auto ancillary, pharmaceuticals, and chemicals. Bhansali highlighted that recent tax cuts announced in the Budget would further support the Indian consumption story, making these sectors even more attractive for long-term investment.

For the full interview, watch the accompanying video

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