Steptrade India Fund

What Is Steptrade India Fund?

Steptrade India Fund is a GIFT City-based Category III AIF structured as a Restricted Non-Retail Scheme under the IFSCA FM Regulations. Its key differentiator is the combination of a Category III AIF structure with a Category I FPI licence, creating a route for eligible global investors to participate in India's SME and microcap market.

The strategy focuses on SME and microcap IPOs, along with listed microcap companies, particularly businesses with market capitalisation of up to ₹1,000 crore. The fund is designed for global investors, including NRIs, foreign nationals and corporates, seeking structured exposure to India's smaller listed businesses.

Rather than relying only on secondary-market buying, the strategy can participate in SME and microcap IPOs as an anchor investor and as a Qualified Institutional Buyer (QIB), combining early access with opportunities in listed companies.

Steptrade India Fund: Snapshot

Fund terms, regulatory registrations, minimum investment and fees should be confirmed against the latest fund documentation before investing.

Investment Strategy: Anchor Investments and QIB Participation

The fund divides its investable capital between two complementary routes: anchor investments and QIB participation.

Up to 40% in Anchor Investments

The fund plans to allocate at least 40% of its investable funds as an anchor investor in Indian SME and microcap IPOs. Anchor participation allows the fund to engage with businesses entering the public market and potentially gain exposure at the IPO stage.

Up to 60% Through QIB Participation

Up to 60% of investable funds can be deployed as a Qualified Institutional Buyer in SME and microcap IPOs as well as listed microcap companies.

The listed-company component focuses particularly on businesses with total market capitalisation of up to ₹1,000 crore.

This creates two routes of exposure:

• SME and microcap IPOs: participation around the time companies enter the listed market.
• Listed SME and microcap companies: investment in businesses that are already publicly traded.
• Anchor investments: early participation in selected IPO opportunities.
• QIB investments: institutional participation across eligible IPO and listed opportunities.

The strategy is sector-agnostic, allowing the investment team to assess opportunities based on company-specific fundamentals and market potential rather than restricting the portfolio to one industry.

Why SME and Microcap Investing?

SME and microcap businesses can occupy an interesting part of India's equity market. Many are smaller than established large-cap companies and may have significant room to expand their revenues, distribution networks, capacity or geographic presence.

For an investor, the attraction lies in accessing businesses before they potentially scale into larger companies.

However, the same characteristics create higher risk. Smaller companies can experience greater earnings volatility, thinner trading volumes and wider price movements. IPO valuations can also leave limited room for error.

That makes research particularly important. The opportunity is not simply about buying small companies; it is about identifying businesses with credible management, scalable operations, market opportunity and a reasonable valuation.

For eligible investors who understand these risks, a specialist SME and microcap IPO strategy can provide exposure to a segment that conventional diversified portfolios may not access in the same way.

Who Manages Steptrade India Fund?

The fund's investment management is led by Kresha Gupta, who has built her professional profile around India's SME and microcap investment ecosystem.

Gupta is recognised for her work in identifying and evaluating smaller businesses and emerging opportunities in India's public markets. Her profile has received coverage across financial and business media, including CNBC Awaaz, Moneycontrol, Economic Times, Business World and Financial Times.

Her focus on smaller companies aligns closely with the fund's investment universe, where company research can require a different approach from analysing established large-cap businesses.

The fund's strategy depends heavily on identifying opportunities where business fundamentals and growth prospects can justify investment despite the additional liquidity and volatility risks associated with smaller companies.

Fund Terms: Structure, Trustee and Regulatory Registration

What Does the Category III AIF + FPI Structure Mean?

The structure combines an Indian alternative investment framework with an international-market access mechanism within GIFT City Fund.

For eligible global investors, this can provide a structured route to India's SME and microcap securities through a regulated fund structure. The FPI component is particularly relevant because it supports the fund's institutional participation in eligible Indian securities.

The exact rights, eligibility requirements, tax treatment and regulatory obligations depend on the investor's status and the applicable fund documents.

What Are the Key Risks?

SME and microcap investing can offer higher growth potential, but investors should understand the trade-offs before considering the fund.

SME and Microcap Liquidity Risk

Smaller companies generally have lower trading volumes than large-cap stocks. Exiting a position may therefore take longer, particularly during stressed market conditions.

IPO Allocation Risk

Participation in an IPO does not guarantee allocation. Demand, issue size and institutional participation can affect the final allocation received by the fund.

Small-Company Concentration Risk

A portfolio focused on smaller businesses can be more sensitive to company-specific developments, earnings disappointments and management decisions.

Valuation Risk

High-growth expectations can sometimes result in expensive valuations. If growth does not materialise, the stock can face significant valuation compression.

GIFT City Regulatory Risk

The fund operates within the GIFT IFSC regulatory framework. Investors should understand the applicable IFSCA rules, fund documents, eligibility requirements and regulatory changes before investing.

Who Is Steptrade India Fund Suitable For?

This strategy may be relevant for eligible investors who:

• Want exposure to India's SME and microcap ecosystem.
• Understand the higher volatility associated with smaller companies.
• Have a long-term investment perspective.
• Are comfortable with IPO allocation and liquidity risks.
• Want exposure through a GIFT City Category III AIF structure.
• Are eligible global investors seeking structured access to Indian SME and microcap opportunities.

It may not be appropriate for investors looking for low-volatility investments, predictable returns or easy short-term liquidity.

Explore Steptrade India Fund Through ALTPORT

For investors looking beyond conventional large-cap strategies, SME and microcap investing can offer access to a different part of India's growth story. Steptrade India Fund combines this specialist investment focus with a GIFT City structure designed for eligible global investors.

ALTPORT can help investors understand the fund structure, investment strategy, eligibility and associated risks before making an investment decision.

Explore GIFT City alternative investments with ALTPORT and speak with an investment specialist to understand whether this strategy fits your portfolio.