For investors seeking exposure to one of the world’s most dynamic economies, the Ashoka India Equity Investment Trust offers a concentrated bet on a single principle: the enduring value of quality. The trust’s strategy is built on a rigorous, bottom-up hunt for Indian companies that combine strong returns on capital with sensible valuations, believing that stock selection is the ultimate driver of long-term outperformance.
This approach is supported by deep proprietary research, strict valuation discipline, and a keen eye on corporate governance. With a long-term horizon, the portfolio is diversified across sectors but carries a distinct bias towards growth, particularly within the small and mid-cap universe. The trust’s managers argue that inefficiencies in India’s vast market create significant opportunities for alpha in these segments. The strategy has delivered, with the trust more than doubling its benchmark’s return since its 2018 launch, despite recent short-term volatility. A unique feature aligning managers with shareholders is a performance fee paid in the trust’s own shares. Reflecting a forward-looking stance, the board has also secured approval to increase holdings in unquoted companies to 15% of assets, seeking further opportunity beyond public markets.
A Closer Look at the Trust’s Largest Holdings
The trust’s conviction is clearly illustrated in its largest equity positions. Its top three holdings—Bharti Airtel, ICICI Bank, and Bajaj Finserv—are not merely large Indian corporates but are each dominant players positioned at the heart of transformative growth sectors.
Leading the portfolio is Bharti Airtel, India’s second-largest telecommunications operator with over 300 million domestic subscribers. The investment case extends beyond scale to improving industry dynamics. After a period of fierce competition, the company implemented its first tariff hike in over two years, boosting revenue per user and profits. More fundamentally, Airtel is a primary beneficiary of India’s massive digital leap, investing heavily in 5G infrastructure and fibre networks to meet exploding demand for high-speed data. The sector’s gross revenue is projected to grow substantially, supported by government connectivity initiatives. A significant near-term challenge is regulatory: following a four-year moratorium, the company must begin paying its hefty adjusted gross revenue (AGR) dues to the Department of Telecommunications, with an initial ₹10,000 crore tranche due by March 2026. The DoT has ruled out relief similar to that granted to a competitor, though Airtel is seeking a recalculation of its total liability, which stood at over ₹51,000 crore at the end of 2025.
The second major holding, ICICI Bank, represents a play on the formalisation and deepening of India’s financial system. As a leading private-sector bank, it is steadily gaining market share from state-owned peers, which still dominate the landscape. The opportunity is vast, given the historic under-penetration of credit in the economy. ICICI’s performance has been robust, with consistent double-digit loan growth and a net profit that reached $1.4 billion in a recent quarter. Critical to the investment thesis is the bank’s strengthening fundamentals: its gross non-performing assets have fallen consistently for four years to 1.73%, while its net interest margin has expanded to 3.68%. This reflects disciplined risk management and a growing, high-quality book. The bank is also a digital leader, recently enabling non-resident Indians to use its iMobile Pay app for UPI payments. While some analysts note challenging short-term valuations, ICICI is widely regarded as a core, long-term “compounders” in the sector.
Completing the trio is Bajaj Finserv, a diversified financial powerhouse with market-leading subsidiaries in consumer lending (Bajaj Finance), general insurance, and life insurance. The group is a direct beneficiary of India’s rising affluence and financial inclusion. Bajaj Finance, in which Bajaj Finserv holds a controlling stake, is expected to grow nearly 1.5 times faster than systemic credit and deliver return on equity above 20%, supported by a formidable technology platform. The insurance arms are also on a strong trajectory; the general insurance unit is among India’s most profitable private players, while the life business is shifting its product mix to improve profitability. Strategically, the group is making bold moves. It recently concluded a 20-year partnership with Allianz SE, taking a 75% direct stake in its insurance subsidiaries. Furthermore, it is pivoting aggressively into artificial intelligence, planning a dedicated AI investment fund and aiming to invest ₹400-450 crore in FY27 to embed “intelligence at scale” across its operations. This aligns with a sector-wide trend, as AI spending in Indian financial services is projected to double in 2026.
The trust’s focus on such companies taps into powerful, structural trends. India’s financial services sector now boasts a $1 trillion market capitalisation, while its telecom market is the world’s second-largest and on the cusp of a 5G revolution. Underpinning it all is a historic shift in the equity market, with domestic capital increasingly flowing into the small- and mid-cap segments where the Ashoka trust actively hunts for its quality-focused, long-term growth stories.
