Overview
PGIM India Equity Portfolio seeks to achieve long term capital appreciation by investing in equity and equity related instruments across market capitalisation.
Portfolio Proposition
MEGATRENDS: Focus on the best ideas in emerging megatrends for capturing the next wave of growth in India’s evolving economy. As India undergoes rapid transformations, there are a few sustainable trends that are emerging such as financialization, manufacturing, digitization, healthcare, and consumerism, these trends represent untapped opportunities.
Portfolio:
Concentrated Holdings: A focused portfolio of 20-25 carefully selected stocks with potential to grow while managing risk.
All Cap approach: Top-down and bottom-up
Low Overlap: Ensures portfolio differentiation and active management by maintaining low overlap with the benchmark.
Risk Management Principles: No more than 15% of the portfolio is invested in a single stock to mitigate concentration risk. Exposure to any single sector is restricted to 30% to ensure diversification across industries.
Dynamic Cash Management Strategy:
Residual Cash Holding: Cash is held as a residual component. The extent of cash holding is not pre-determined; it varies based on the availability of attractive investment opportunities. When opportunities are scarce, cash positions may increase to preserve capital.
Megatrends: What, Why & How?
What are Megatrends?
Megatrends are large, transformative forces shaping the future across sectors, industries and societies. They drive long-term change, influencing businesses, economies and individuals in a significant manner
Megatrends are large, transformative forces shaping the future across sectors, industries and societies. They drive long-term change, influencing businesses, economies and individuals in a significant manner
Why are they important in investing?
Capturing High Growth Opportunities
Reshaping the competitive landscape and giving rise to new-age sectors
Creates opportunities across various segments
Overall, three criteria must be met to distinguish megatrends from short-term fads*:
A broad scope, with the potential to impact businesses, economies, cultures, and human beings globally
A long-time horizon of 10 years or more
Potential to cause a seismic shift in economics, politics, technology, and/or society
Portfolio Strategy
Our endeavour will be to buy good businesses at the bottom of a cycle.
Good businesses are the ones that have demonstrated strong cashflows and have a clean balance sheet over their history.
At the bottom of the cycle, near-term profitability is impaired. This leads to subdued stock prices and valuations. As earnings start coming back over the next 3-4 years, these companies are likely, not only to see stocks returns in tandem with earnings recovery, but also the chance of a PE expansion, if bought at subdued valuations.
To ensure that these turnarounds work both sectors and stocks playout, the focus will be on turnarounds where:–
- Historical cashflows have been strong (60-70% positive operating cashflow generation through the history).
- Balance sheets are clean, hence debt servicing is not an issue.
Investment Process
Key Parameters
Our portfolio manager employs a disciplined approach to identify and manage investments, focusing on quality, growth potential and risk management.
Identifying potential growth opportunities:
The portfolio manager seeks companies with above-industry growth potential over next 3-5 years, strong internal cash generation without heavy reliance on external funding and management with a solid track record in ethical capital allocation and fairness to minority shareholders.
Focus on Operating Cash Flows, Leverage, and Corporate Governance
The portfolio manager prioritizes companies with positive operating cash flows at least 60% of the time* and avoids highly leveraged companies, specifically those with a net debt-to-equity ratio above 2. The portfolio manager exercises caution regarding promoter integrity by selecting companies with no significant corporate governance issues in their history.
Sell Discipline:
We implement a disciplined approach to selling stocks when the original investment thesis fundamentally changes, ensuring capital preservation. Additionally, if valuations appear to exceed reasonable PEG levels, we may consider exiting the position.
Spotting Current MEGATRENDS
Manufacturing/ Private Capex
Manufacturing is expected to drive overall economic growth. Government initiatives like PLI (Production Linked Incentive), and MAKE IN INDIA are leading to fresh investments
Digitization
offers diverse investment opportunities across sectors like cloud computing, IoT, digital entertainment, and businesses leveraging technology to drive growth.
Healthcare
The pandemic highlighted the importance of healthcare, driving government support and positioning India as the "pharmacy of the world." with strong tailwinds for diagnostics and growing medical tourism, the sector is poised for growth.
Financialization
With increasing participation in capital--markets, Broking, asset management, insurance and wealth management will benefit from the shift towards financial assets
Consumerism
India is the fastest-growing consumer market. Rising income levels, rapid urbanization, Favorable demographics & premiumization will drive consumption themes in India
Investment Approach
Investment Objective
PGIM India Equity Portfolio seeks to achieve long term capital appreciation by investing in equity and equity related instruments across market capitalization. However, there can be no assurance that the investment objective will be achieved.
Types of Securities
Funds would be predominantly invested in listed equity and equity related instruments.
Basis of selection
The portfolio will invest in businesses with a visibility of earnings growth over the next three to four years, with an aim for capital appreciation. The portfolio will be conscious about downside business risk management and strength of the businesses while investing. The strategy will have three filters for including stocks in the investment universe:
- Positive Operating Cashflows for at least 60% of the business history*
- Low leveraged balance sheets (Net debt: Equity < 2)
- No major corporate governance issues in the past
*Nifty 50, Nifty Midcap 100, BSE 200 and top 250 stocks defined by AMFI are automatically apart of the investment universe.
The portfolio manager shall have a leeway of up to 10% to invest in stocks beyond the above-mentioned process.
Portfolio Allocation
The portfolio will comprise 20-25 businesses across a range of market capitalizations. Pending deployment of funds of the Portfolio in securities in terms of the investment objective, the funds of the Portfolio may be parked in short term deposits of scheduled commercial banks or in the liquid and debt schemes of PGIM India Mutual Fund.
Investment horizon
This portfolio is suitable for investors with investment horizon of at least 3 years.
Risk Associated
Please refer to disclosure document.
Portfolio Manager
Surjitt Singh Arora,
Principal Officer and Portfolio Manager - Portfolio Management Services,
PGIM India Asset Management Pvt. Ltd.
PGIM India Asset Management Pvt. Ltd.
Surjitt Singh Arora is Portfolio Manager – Portfolio Management Services at PGIM India Asset Management Private Limited.
Surjitt Singh Arora has more than 18 years of rich work experience in the Equity Markets including over 8 years in the asset management industry. In his last stint, Surjitt was Head - PMS and Head - Principal Officer with Tata Asset Management, where he was managing Tata ACT and Tata Emerging Opportunities Portfolio. Prior to that he was with Tata Mutual Fund as Equity Research Analyst.
Surjitt holds a Bachelor’s degree in Management Studies from Sydenham College, Mumbai and a Master’s degree in Management Studies from Sydenham Institute of Management and Research (SIMSREE), Mumbai.
Performance
Period
Portfolio
Nifty 50 TRI
Nifty 500 Multicap 50:25:25 (TRI)
1 Month
-13.05%
-5.79%
-8.91%
3 Months
-20.16%
-8.10%
-14.19%
6 Months
-22.17%
-11.98%
-17.59%
1 Year
-3.21%
1.89%
-1.03%
2 Years
15.41%
14.41%
20.89%
Since inception date 19/01/2023
14.30%
11.07%
16.53%
#w.e.f. April 1, 2023, the benchmark has changed to the Nifty 50 (TRI) from Nifty 500 TRI. The portfolio is live from Jan 2023 and thus the performance is shown for 1 and 3 months period.
Portfolio
Top 10 Holdings of India Equity Portfolio Strategy as on 28th February 2025
Security Name
Portfolio Weightage
BHARAT RASAYAN LTD
6.43%
HDFC BANK LTD
6.04%
SAGILITY INDIA LTD
6.01%
WINDLAS BIOTECH LTD
5.90%
ARTEMIS MEDICARE SERVICES LTD
5.46%
APL APOLLO TUBES LTD
5.31%
CUMMINS INDIA LTD
5.23%
ABB INDIA LTD
5.20%
AKUMS DRUGS and PHARMACEUTICALS LTD
4.96%
HAVELLS INDIA LTD
4.60%
Portfolio Documents
Presentations
Our Offerings
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Core Equity Portfolio
We measure quality as a mark of longevity. That’s how we select companies at reasonable valuations and with the potential of creating long-term wealth in a multi-cap portfolio.
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Phoenix Portfolio
PGIM India Phoenix Portfolio seeks out small and mid-cap companies that are close to an inflection point in their lifecycle either due to a cyclical or structural changes.
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EQUITY PORTFOLIO – SERIES I
PGIM India Equity Portfolio – Series I (High Conviction Themes) seeks to generate returns by investing in a portfolio of quality companies that are beneficiaries of efficient operating.
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EQUITY PORTFOLIO – SERIES ii
PGIM India Equity Portfolio – Series II seeks to generate returns by investing in a portfolio of predominantly quality stocks with good fundamentals.
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Equity NDPMS Portfolio
Under the Non Discretionary Services, the Portfolio Manager will manage the Client’s portfolio in accordance with the directions received from the Client and pursuant to Client’s consent being received for each investment/transaction.
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