Gaja Alternative Asset Management

India's alternative-investment market is scaling from a low base relative to household and institutional financial savings. The RHP-incorporated CRISIL update shows AIF commitments rising from INR 2.8 Tn in FY19 to INR 16.9 Tn in FY26, a ~29.2% CAGR, while AIF commitments were still only about 4.9% of GDP. This combination of strong growth and underpenetration directly expands the addressable fundraising pool for established managers such as Gaja.

The key tailwinds are:

• Alternative-investment AUM/commitments are projected to grow at approximately 25-27% CAGR from March 2026 to March 2030, reaching roughly INR 41-44 Tn

• AIFs increased from approximately 1.5% of GDP in FY19 to 4.9% in FY26, but remain substantially smaller than deposits and traditional managed products

• Category II AIFs represented 75.2% of AIF commitments in FY26, directly relevant because Gaja primarily manages Category II funds

• Investments made as a share of funds raised reached 96.2% by March 2026, indicating a progressively deployed and institutionalised market

India's private-equity market is broadening beyond mega deals as growth-stage and mid-market businesses seek institutional capital, governance support and exit pathways. Gaja focuses on the mid-market segment, where the RHP defines deals broadly at INR 50-250 Cr. This creates a large sourcing universe in sectors where operational intervention can potentially drive scale and institutionalisation.

The key details are:

• Mid-market PE share increased to approximately 22% by March 2026, from 19% in FY25 and a lower base in FY20

• The Company has historically focused on consumer, education/enterprise ecosystem, financial services and, more recently, digital technology opportunities

• A growing IPO and strategic M&A; exit ecosystem can improve private-equity liquidity, shorten realisation cycles and support carry crystallisation

• Fund II and Fund III provide realised/partially realised evidence across multiple cycles, supporting fundraising credibility for future funds

Alternative AMCs need repeat access to institutional and HNI capital more than physical distribution infrastructure. The Indian LP ecosystem is gradually deepening while global institutions continue to allocate to India-focused private markets. Gaja enters this cycle with a diversified network spanning more than 20 countries and a growing domestic LP base, which can lower fundraising friction for successor funds.

The key details are:

• Gaja had 63.42% of fund commitments from outside India and 36.58% from domestic LPs as of March 2026

• LP categories include fund-of-funds managers, alternative asset managers, HNIs/UHNIs, sovereign wealth funds, pensions, insurers and family offices

• Fund IV received commitments from 72 domestic LPs, higher than domestic participation in earlier Gaja funds

• A direct relationship-led fundraising model can reduce third-party distribution costs and improve recurring economics as fund sizes grow

Alternative asset management remains exposed to capital-market cycles, fundraising liquidity, asset valuations and regulatory requirements. Management fees can be recurring, but performance income depends on successful portfolio exits and realisations, which can be delayed by weak public markets or M&A; activity. Intense competition for assets and LP capital can also compress returns and increase talent costs, while illiquid private assets require judgement-heavy valuation processes.

The key risks are:

• Fundraising and exit cycles are correlated with market sentiment; delayed exits can defer distributions, carried interest and the launch of successor funds

• Private-asset valuations rely on assumptions and comparable transactions; changes in discount rates, earnings or market multiples can materially change reported fund values

• Competition from global and domestic PE/alternative managers can raise entry valuations, reduce expected returns and increase compensation/fundraising costs

• Managers face extensive fiduciary, conflict-management, reporting, valuation and investor-protection requirements under SEBI AIF rules and offshore regimes

The sector does not rely on direct subsidies, but a clearer regulatory architecture has helped alternatives become an institutional asset class. SEBI's AIF framework specifies manager/sponsor eligibility, continuing-interest requirements, concentration limits, governance standards and disclosure obligations. This formalisation can raise entry barriers and investor confidence, benefiting established managers with compliance infrastructure and long operating histories.

The key policies are:

• Category I and II AIF sponsors/managers must generally maintain continuing interest of at least 2.5% of corpus or INR 5 Cr, whichever is lower

• SEBI requires AIF managers and sponsors to remain fit-and-proper and maintain processes for conflicts, records, complaints, transparency and regulatory reporting

• The June 2026 AIF Master Circular consolidates operating and disclosure guidance, including PPM filing, sponsor/manager obligations and unit-related processes

• Co-investment structures and gradual institutional participation broaden the product toolkit, but every new strategy remains subject to scheme-specific approvals and documentation