Unifi BCAD

Investment Strategy

Unifi Capital’s Business Consolidations After Disruptions (BCAD) strategy invests in category leaders operating within highly fragmented industries that are undergoing structural disruption. The strategy is designed to benefit from the progressive migration of market share from unorganised to organised players, driven by regulatory changes, demographic shifts, evolving consumer preferences, urbanisation, and technology adoption. By focusing on businesses that are structurally advantaged to consolidate share post-disruption, BCAD aims to capture long-term value creation arising from industry formalisation.

Core Investment Approach

Identifying Structural Shifts

The strategy is anchored around identifying long-duration structural trends that accelerate consolidation within fragmented sectors. Key drivers include formalisation of the economy through regulatory and policy measures such as GST, demonetisation, and digital adoption; increasing consumer preference for branded and organised players; and the financialisation of household savings as wealth shifts from physical to financial assets.

Bottom-Up Stock Selection

Stock selection is fundamentally bottom-up, focusing on companies that demonstrate consistent volume growth, operating leverage, and capital efficiency. Preference is given to businesses gaining market share through premiumisation, cost leadership, or scale advantages, while maintaining high governance standards. Companies with a history of poor capital allocation or weak governance are systematically excluded.

High-Growth, Buy-and-Hold Orientation

The portfolio is constructed with a long-term wealth creation mindset, favouring businesses with extended growth runways and the ability to compound earnings over time. Investments are made at reasonable valuations, with flexibility retained to reallocate capital as structural trends evolve or relative opportunities change.

Sector-Agnostic Implementation

While the strategy is theme-driven, it remains sector-agnostic in execution, with investments spanning consumer, financials, information technology, healthcare, infrastructure, and manufacturing. The underlying thematic lens is centred around essential consumption and services (“Roti, Kapda, Makaan”), alongside financialisation and service-led growth.

PMS Background

Founded in 2001 by Sarath Reddy, Unifi has scaled into one of the top five PMS providers in India, a trajectory made particularly credible by the fact that the platform was built independently without the backing of a large broker, mutual fund house, or star fund manager. Unifi’s growth has been driven by deep client engagement and a differentiated product philosophy centered on identifying time-bound market opportunities and launching focused, often close-ended strategies rather than maintaining perpetual evergreen offerings. This ability to consistently conceptualize, execute, and close niche strategies has allowed Unifi to establish itself as a distinctive PMS franchise despite operating without institutional sponsorship.

PMS Investment Philosophy

Unifi follows a value-driven approach to investing in growth businesses, where valuation discipline is paramount but business growth is viewed as the critical catalyst for re-rating. The firm focuses on niche opportunities that are often constrained by time and deployable capital, leading to strategies that are launched selectively and closed once the underlying opportunity matures. This philosophy has resulted in a thematic investing framework, where each strategy is built around a clearly defined market inefficiency or structural trend rather than broad-based market exposure.

Core Thematic Frameworks

1. Spin-off: Exploits mispricing arising from corporate restructurings and special situations.
2. Deep Value Discount (DVD): Targets businesses trading at a deep discount to intrinsic value due to low liquidity, limited market understanding, smaller market capitalisation, or weak benchmark linkage.
3. HoldCo: Identifies strong underlying operating businesses embedded within holding company structures, where valuation discounts are expected to narrow due to regulatory or governance-driven change.
4. APJ20: Focuses on sectors that are becoming globally competitive and are entering a phase of sustained market expansion, investing in firms well-positioned to benefit from these shifts.
5. Green: Invests in companies enabling carbon reduction or more efficient use of natural resources, across themes such as emission control, energy efficiency, water management, and waste management.
6. Insider Shadow: Invests alongside founders who have made meaningful open-market share purchases, indicating high internal conviction.
7. BCAD: Targets established companies leading market share migration from unorganised to organised segments, benefiting from structural consolidation trends.

Thematic Strategy Orientation

Each Unifi strategy is structured around a specific, well-defined theme spanning special situations, deep value, disruption-led consolidation, sustainability, or insider-led conviction. These strategies typically operate in less crowded segments of the market and are designed to deliver differentiated, risk-adjusted returns while also serving as portfolio diversifiers.

Suitable For

Investors seeking targeted exposure to clearly defined investment themes and time-bound opportunities, rather than broad, benchmark-oriented equity strategies.