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Caprize Framework
Our success isn’t magic. It’s driven by a robust methodology, meticulously honed over years of experience.
This framework guides us in identifying promising investment themes and strategies. But what you see – the returns on our ideas – is just the tip of the iceberg. Below the surface lies a world of rigorous analysis, meticulous research, continuous monitoring, risk management, and a relentless pursuit of excellence.
01
Identifying Ideas
Step 1
Identify Growth Opportunities
We evaluate businesses poised at an earnings inflection point due to multiple local, global, or government/industry-backed tailwinds.
Step 2
Valuation and growth check
Once identified, we shortlist companies with:
Strong growth visibility: 25-30% CAGR for the next 2-3 years.
Attractive valuations: forward P/E ratio below 15x.
Step 3
Final assessment parameter
We evaluate businesses poised at an earnings inflection point due to multiple local, global, or government/industry-backed tailwinds.
Step 4
Due Diligence
To assess management quality and business potential, we conduct comprehensive due diligence process that includes:
Conduct meetings with senior management to understand the company’s strategic vision and management quality.
Visit facilities to assess operational capabilities and efficiency.
Analyze competitors to gauge industry positioning and competitive advantages.
Perform channel and supply chain checks to ascertain management breadth and ambition.
Step 5
Internal Evaluation
Each shortlisted company undergoes a comprehensive assessment based on tangible, intangible, qualitative, and quantitative parameters, informing our internal rating process.
Step 6
Investment Allocation
Upon satisfaction with our internal rating, we determine the investment allocation and formulate an exit strategy aligned with the earnings cycle.
02
Weight base allocation
We invest primarily in small and mid-capitalization companies, aiming for strong growth potential.
Our allocation considers market liquidity, with a higher weighting towards mid-caps for better execution and lower impact cost
We maintain a measured allocation to micro-caps to balance potential drawdowns and liquidity considerations.
03
Risk Management and exit strategy
We Develop an exit strategy based on the expected earnings cycle and PE re-rating prospects.
We adhere to a strict allocation policy, never exceeding 8% of the portfolio in a single investment. This mitigates potential losses and allows for diversification.
We have a 20% drawdown threshold as a safeguard. If a company experiences a significant decline without clear justification, we exit the investment to limit potential losses.
04
Monitoring & Tracking
We will continuously monitor our ideas’ performances, markets and trends to adjust the exit strategy as needed.
If the company surpasses expectations and reaches fair valuation multiples significantly higher than initial projections, we may consider an early exit to capture these gains, irrespective of broader market sentiment. This prevents missing out on potential upside due to over-enthusiasm in the market.
SEBI Registered Research Analyst
Reg No: INH000015446
(Validity: 14/03/2024 – Perpetual)
Compliance Officer
Sushrut Gokhale
022 6239 2018, 9226656066
Office No. 1104
Lodha Supremus
Dr. Elijah Moses Road
Worli Naka
Worli – 400018
Lodha Supremus
Dr. Elijah Moses Road
Worli Naka
Worli – 400018
Legal
8657 Elmwood Avenue Logansport, IN 46947
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(910) 658-2992
Disclaimer: The information provided by Caprize through its website is for informational and
educational purposes only and is not a solicitation to buy any of our products
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