Ajay Vora, Head Equities at Nuvama Asset Management, discusses the growth and opportunities in the Alternative Investment Fund (AIF) category in India. Vora points out that the AIF category is growing at a faster pace than Mutual Funds (MFs) and believes this growth will continue. He also discusses the current exuberance in IPOs as the Nifty Index climbs to 20K. Vora advises caution and emphasizes the importance of investing in quality companies at reasonable valuations. He further analyzes the Indian market compared to its peers, highlighting the long-term growth potential of the Indian economy and the interest from Foreign Institutional Investors (FIIs). Vora also discusses the growing interest in alternative investments, particularly from Tier-II and Tier-III cities, and the shift in investor preferences towards debt and equity funds. He mentions that investors are moving away from traditional fixed income products and looking for higher yielding structured credit products. Vora notes that equity as an asset class, where Indian households are significantly underinvested, is seeing increasing allocation, as evidenced by the rising monthly Systematic Investment Plan (SIP) amounts. The small and midcap segment has also benefited from higher inflows. Vora discusses the performance of this segment, mentioning the strong corporate earnings outlook and years of underperformance. He believes that companies aligned to this theme, with strong earnings outlook and quality management, can outperform. Vora also highlights the maturity of retail investors in the Indian market, with monthly SIP numbers doubling over the past two years. He expresses confidence in the India growth story and predicts higher allocation to equities in the future if earnings continue to compound at 12%-13%. The interview also touches on the impact of Foreign Direct Investment (FDI) on the Indian markets, with Vora stating that India is an oasis of growth compared to developed and emerging economies. He mentions the emergence of newer sectors like renewables, semiconductors, and data centers that can attract long-term capital through the FDI route. When asked about investing fresh money into Indian markets, Vora emphasizes the importance of asset allocation across different asset classes to achieve long-term compound returns. He suggests an allocation that can help investments compound at 12-15% over the long term. Vora advises investors to focus on the basics, such as the nature of the business, quality of management, return ratio metrics, free cash flow generation, and valuation. He also touches on sectors that may be overheated, cautioning about sectors like capital goods that are trading at the upper band of their historical valuation range. Finally, Vora emphasizes the importance of not losing capital in any market environment and advises investors to stick to investing principles and focus on fundamentals.