Earnings Call Transcript - XNSE:GAJA 2026-11-04

Operator

Ladies and gentlemen, good day, and welcome to the Gaja Alternative Asset Management Q2H1F527 Earnings Conference Call. As a reminder, all participant lines will be in a listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you assist in the conference call, please signal an operator by pressing star and then zero on your touchtone phone. I now hand the conference over to Mr. Dabakar Pingley from EY. Thank you, and over to you.

Dabakar Pingley, Head of Investor Relations

Thank you so much. Good evening, everyone, and welcome to the earnings call of Gaja Alternative Asset Management Limited. The company has published its results and uploaded investor presentations on the exchanges earlier today. Before we start, a disclaimer. Some of the statements made in today's earnings call may be forward-looking in nature. Such forward-looking statements are subject to risk and unfairities which can cause actual results to differ from those anticipated. Such statements are made on management beliefs and assumptions based by information currently available to the management. Audiences are cautioned not to place undue reliance on these forward statements while making their investment decisions. On that note, let me introduce you to the management today. We have with us Mr. Anjit Shah, Executive Vice Chairman, Mr. Gopal Jain, Managing Director and Chief Executive Officer, and Mr. Arvind Jain, Chief Financial Officer and other members of the team. Without further ado, I'd like to hand over the call to Gopal Jain for some remarks. Thank you, Anubhati Gopala.

Ranjit Shah, Chairman

Good evening, everyone. I'm Ranjit Shah, Executive Vice Chairman, and with me are Gopal Jain, Managing Director, Imran Jafar, Executive Director, and Abhinav Jain, Chief Financial Officer. Once again, good evening, and thank you for joining our results call for the second quarter and the first half of FY2627. These are our second quarterly results as a listed pure-play alternatives asset management company, and the first in which a quarter-end balance sheet reflects the proceeds of our IPO. Some of you joined our first call in September, and some of you are engaging with our business for the first time. We have therefore kept the same structure as our last call, a short introduction to who we are and what we do, the key highlights of the quarter and the half-year, And a slide-by-slide walkthrough of the investor presentation, which covers how our platform operates and earns. Let me start with who we are. Kaja Alternative AMC is a fund manager of AIFs and an advisor to offshore funds that invests in high-growth, innovation-led, mid-market companies in India. Since 2005, we have raised four funds in our flagship strategy with more than 4,200 crores of committed capital, invested across multiple market cycles, and generated an average gross multiple of 3.8x across our mature funds. We are now raising a fifth fund for our flagship strategy while diversifying into a new strategy, secondaries. For those who are new to the company, a word on why we are public. India's savings pool is growing fast, as the growth of the mutual fund industry shows. Yet alternatives, meaning private equity and venture capital investments in unlisted businesses, remain accessible to a very small share of investors, because alternative investment funds are restricted to qualified investors. A Listed Alternatives AMC changes that. Any investor can now own the manager, and with it, the economics of every fund the platform raises. This follows a proven global playbook. Listed alternative asset managers have created substantial value for their shareholders since they began listing nearly 20 years ago. And institutional AMCs are very much preferred by institutional LPs or fund investors. making fundraising faster and less expensive. We covered the IPO in detail on our last call, so I will only recap it. We listed on 26th August of 2026. The offer was 550 crore rupees, including a fresh issue of 450 crore rupees, and was subscribed 32.8 times. The net proceeds are being used to make sponsor commitments to Fund 4, Fund 5, and Eastgate secondaries and for general corporate purposes. And slide 23 of our investor presentation shows how much of that has been deployed so far. How the IPO has strengthened our balance sheet and what that means for our capacity to grow is one of the main themes of today's call, and I will come to it in the highlights.

Ranjit Shah, Chairman

Let us look at the key highlights for the quarter and

Ranjit Shah, Chairman

the half-year ended 30th September 2026. You would have read the press release, the investor presentation, and the financials, which were uploaded earlier today. I refer to slide 3 of the investor presentation and to the income statements on slides 18 to 20. Firstly, for the second quarter, total income was 65.5 crore rupees, up 26% on the first quarter. And profit after tax was 64.7 crore rupees, up 138% on the first quarter and 54% on the same quarter last year. In the first half of 26-27, we earned a total income of 117.3 crore rupees compared to 110.4 crore rupees in the first half of last year, A growth of 6% and a profit after tax of $91.90 compared to... 62.1 crore rupees, a growth of 48%. And for the 12 months ended September 2026, total income was 164.8 crore rupees, a growth of 5% year on year, and profit after tax was 111.8 crore rupees, a growth of 28%. Our cost-to-income ratio for the half-year was 29% against 38% a year ago. Our first half performance shows the strength of the underlying franchise, and I would draw out four things. First, income came from three of our funds. During the quarter, we earned income from Fund 4, Fund 3, and Fund 2. Carried interest from a significant exit in Fund 2 contributed to growth and performance income, which rose 55% over the first quarter. Fee income was largely flat at 15 crore rupees for the quarter. Second, profit after tracts grew 48% over the first half of FY2526, and the board has today declared an interim dividend of 50 paisae per share, or 10% of the face value. This follows the final dividend of 75 paisae per share, or 15%, for FY2526. This quarter's profit includes a write-back of 15 crore rupees from a lower provision for tax on our sponsor commitment gains, revised on the advice of our new auditors, PricewaterCoopers. Third, we have strengthened the balance sheet. Net worth now stands at 1,106 crore rupees as of 30 September 2026, up 92% from 574.6 crore rupees a year ago, and we are nearly debt-free. Our strong balance sheet now earns treasury income, a fourth pillar of growth alongside management fees, carried interest and gains on sponsor commitments. Fourth, a significant part of our net worth, 690 crore rupees, is in cash and liquid investments, which gives us a greatly enhanced capacity to raise new funds. At a sponsor commitment of 8.4% of fund size, which is the level of our commitment to fund four, That capital gives us the capacity to sponsor approximately 8,000 crore rupees of new funds. Every rupee of that capital, when raised, earns management fee and carried interest for the company, and the sponsor commitment itself earns the full return of the fund. Our two new funds, Fund 5 and Eastgate Secondaries Fund 1, are making steady progress towards their capital-raising targets, and we will say more about them when we come to slide 15. I now refer you to slide four of our presentation, which sets out the six things that define the company. 22 years of building a leading alternatives platform, a first quartile track record across all our funds, a global investor franchise of about 300 limited partners across more than 20 countries, a listed platform with robust governance and access to capital. A strong financial profile with a cash-rich balance sheet and high profitability, and a multi-strategy roadmap with our flagship private equity strategy and secondaries both alike. The charts on the right show the financial progression. Total income has grown from 104 crore rupees in FI 2324 to 165 crore rupees for the 12 months to September 26th. And Profit After Tax from 45 crore rupees to 112 crore rupees, with the bat margin rising from 43% to 68%. Net worth has grown from 332 crore rupees at the end of 23-24 to 1,106 crore rupees at 30 September 2026, including the IPO proceeds. Return on equity for the 12 months to September 2026 was 13%, and we will come back to that ratio when we discuss slide 22. I will draw your attention to the next slide, slide 5. For those of you who are new to the company, slide 5 shows the board of the listed company, our leadership, our advisors, and the board of our Mauritius entity, and we would like to spend a moment on each. Our board is chaired by Mr. Upendra Kumar Sinha in a non-executive capacity. Mr. Sinha has spent over 38 years in public policy and financial markets, including as chairman of SEBI and as chairman and managing director of UTI Asset Management and chairman of ANFI. Mr. Prithvi Pal Singh Haldia, non-executive director. is the founder of Prime Database and Praxis Consulting, and has served on committees constituted by the Ministry of Finance, SEBI, the Ministry of Corporate Affairs, the NSE, and the BSE. Mr. Shailesh Haripakti, an independent director, brings over 30 years in governance and audit, and serves on the boards of several leading listed companies. Mr. Manish Sabarwal, a non-executive director, is a co-founder of Team Lease and has served on the board of the Reserve Bank of India. Dr. Arundra Bhattacharya, an independent director, spent over 20 years at the Boston Consulting Group, including as managing partner of the India business. And Ms. Sheetal Kakar Mehra, an independent director, is a co-founder of Catalyst and brings 20 years of experience in leadership development and executive coaching. This is a highly experienced board of veterans in their respective fields. They provide independent perspectives on regulation, governance, strategy, finance, and human capital. On the executive side, the defining characteristic of the team is continuity. The three co-founders have worked together since 2005. The investment leadership is supported by Sushen Chopra and Dheeraj Devta, both partners of the firm, and Abhinav Jain is our Chief Financial Officer. The average tenure of our senior leadership team is 17 years. We're also supported by three operating and strategic advisors, Sanjay Patel, Chairman of Apollo Enterprise Strategies in New York, Asim Chandra, Co-Founder of Immersa.ai, and formerly Senior Vice President at Adobe Systems, and Himantri Shah, formerly Senior Director at Gaja Capital. The board of our Mauritius Entity includes two directors, Riyaz Karimji, founder and managing partner of Surya Capital, and Saurabh Banerjee, portfolio manager at Columbia Threadneedle Investments. Let's move to slide six, where we will take a minute to explain the structure. Public shareholders own shares in Gaja Alternative Asset Management Limited in the same way as any other listed stock. The company is the asset manager. It earns management fees, carried interest, income from its sponsor commitment, and treasury income on its own balance sheet. It retains all of these economics. The company manages AIFs and offshore funds across two strategies. The flagship strategy comprises four invested funds, with a fifth registered with SEBI now raising Fund 1 is realized. Funds 2 and 3 are exiting, and Fund 4 is investing. And all four, as I said earlier, rank first quartile against the industry benchmarks. The second strategy, Eastgate Secondaries, has one fund which is also raising. In future, we may add other strategies and funds which the same AMC will develop and manage. The structural point is that the shareholder is not buying exposure to a single fund vintage. The shareholder is buying the manager and therefore participates in the economics of every fund the platform raises. Moving to slide 7, this slide covers the market opportunity. AIF commitments in India reached 16.9 trillion rupees in FY26. Having grown at a compound rate of 29% a year since FY19. Crystal projects growth of 25 to 27% a year to FY30, taking commitments to 41 to 44 trillion rupees. Over the same seven years, bank deposits grew 2.1 times and mutual fund AUM grew 3.3 times, while AIF commitments grew 6 times. Making AIFs one of the fastest-growing financial asset classes in the country. On slide 8, slide 8 is new this quarter, and it covers the next wave of capital for alternatives, which is domestic institutions. The chart on the left puts the size of the domestic pools in perspective. Bank deposits stand at 260.8 trillion rupees. Mutual funds at $81.5 trillion, retirement pools, meaning NPS, EPFO, and APY at $45 trillion, and AIF commitments at $16.9 trillion. Each of those larger pools is beginning to open up to alternatives. The NPS has been permitted to invest in Category 1 and Category 2 AIFs since January 2026. And it started making active commitments to AIFs in October 2026. Insurers are permitted to invest within regulatory limits, and their exposures remain nascent. Banks are permitted to invest, and the RBI's easing of norms in Jan 26 is driving penetration. And the number of ultra-wealthy individuals in India has grown 63% in the last five years, with managed wealth expected to nearly double by 2030. The emergence of domestic capital has the potential to make India one of the dominant alternative markets globally. On slide 9, one of the key differentiators of GAJA AMC is the sponsor commitment, and sponsor commitment is where alignment becomes measurable. Our sponsor commitment across funds is 589 crore rupees, including the two new funds, which represent 7.1% of total fund size. Fund-by-fund, that is 6% of Fund 2, 4.4% of Fund 3, 8.5% of Fund 4, and 8.4% of the proposed Fund 5, and 7% of the proposed Eastgate Secondary Fund 1. These levels are substantially above the minimum thresholds prescribed under the SEBI AIF regulations. This is significant for two reasons. First, our investors can see that we take the same risk they do. That helps us raise capital through our own network and lowers the cost of fundraising. Second, the sponsor commitment earns the entirety of fund performance without fees or carried interest, which improves the unit economics of the platform. The IPO has changed the scale at which we can do this. We have said that we plan to raise our sponsor commitment to 10% of fund size over time. And the slide 14 shows the cash and liquid investments on our balance sheet. Gives us the capacity to sponsor approximately 8,000 crores rupees of new funds at an 8.4% sponsor commitment. I now request Imran Jaffer, Executive Director, to take the next two slides on key differentiators.

Imran Jaffer, Other

Thank you, Ranjit. Good evening. I'll start at slide 10. Our investment approach combines sector focus with a repeatable active ownership model. We invest across four sectoral teams within Indian mid-market private equity, intelligent software automation, deep tech, and AI, financial services, consumer, and education, employment, and employability. These are large growing sectors with strong macro tailwinds. We have added each sector carefully and gradually after deep research and coverage of the market. The value creation playbook is applied consistently across our investments. We focus on mid-market private enterprises with headroom to scale. We invest in partnership with professional entrepreneurs and management teams. We engage actively on strategy, talent, sales, finance, and governance to help these companies scale. And we prepare these portfolio companies for strategic and financial exits. I'd like to take you now to slide 11. To talk about another key differentiator of the funds business, which is our diversified LP franchise, our investor franchise is the engine of future fundraising. We have 298 limited partners invested across Gajah Capital's existing funds. Our wider global and domestic investor network stands at approximately 900 investors with relationships across India and more than 20 countries. These investors include leading development financial institutions, sovereign wealth funds, leading Indian banks, top insurance companies, established domestic and overseas family offices, and specialized fund of funds focused on deep tech and AI. These relationships built over two decades help us maintain a low cost of distribution. Because we raise most of our capital directly through this network, we rely less on distributors and intermediaries than would otherwise be typical for a manager of our size.

Ranjit Shah, Chairman

Thanks, Inran. I now request Mr. Gopal Jain, MD and CEO, to cover the next few slides on our business model and growth strategy.

Gopal Jain, CEO

Thank you, Ranjit. I'll first cover slide 12, which covers our business model and the multiple income streams. In addition to management fee, Carried interest and income from sponsor commitment. Treasury income is emerging as the fourth pillar of our income. We have been saying so far that we have three pillars to our business. During this quarter, a fourth pillar has emerged. What is unique about Graja Capital is that 100% of each of these streams, namely management fee, carried interest, and income from sponsor commitment comes to the AMC. And 100% from each of the funds that we manage. For the 12 months to September 2026, fee income was 61.3 crore rupees, or 37% of total income. Performance income was 85.4 crore rupees, or 52%. And treasury income was 18.1 crore, 11%. First, let's talk about our fee income. In our business, In the private equity business, specifically AIF Category 2 businesses, management fee is fixed and is earned on the initial committed capital. After a few years, it is earned on the net invested capital of every fund we manage. Secondly, carried interest. Carried interest in simple terms is the share of the fund's profits. It is usually calculated above a hurdle rate and We receive this carried interest from the fund as a manager. We earn carried interest with full catch-up. This is again a unique aspect of our funds across all our funds. Also, there are two typical methodologies. One is the American waterfall. The other is the European waterfall. We use the European waterfall methodology, which is calculated on the fund as a whole rather than deal by deal. What that means is, first, we have to return the fund along with the hurdle, and then we start earning the carry. What this does is, it makes the structure immune to Clawbacks. Third, income from sponsor commitment. What is that? This is the return that we generate on the company's own capital committed to the funds. And we earn this capital. Free from management fee and carried interest. Because after all, we can't be paying fee and carried interest to ourselves. So we capture the gross multiple on invested capital in our funds. Our valuation approach here is comprehensive and conservative. The funds are regulated by CELI. This is a CELI-described network. It is audited at multiple levels. And we have been doing this for close to 20 years. Every quarter, we have been reporting the value of our fund to our investors, and we have a stellar track record in terms of timeliness, accuracy, and process. Fourth and finally, our treasury income. This is the return on the surplus cash and investments held on our balance sheet before they are drawn into sponsor commitments. We will explain shortly how this has significantly expanded during this quarter. We manage this capital rather conservatively in liquid and debt investments. I'll now move to slide 13. Slide 13 talks about our business model and how the income streams build across a fund's life. Slide 13 shows how the three operating streams build over a fund's life through the four stages of raising a fund, investing a fund, Building value in our companies and everything. Let's start with management fee. Management fee is recurring in nature, and we earn this through the fund's life. It is initially on the total invested capital, and then it declines to become computed on net invested capital. Income from sponsor commitment, the second stream, accrues through the fair valuation gains over the investment cycle until the fund is fully exited. The sponsor typically ends up earning more than the underlying investors because it gets the gross multiple on invested capital. Carried interest is earned during the exit period. It is earned after the principal has been returned the initial committed capital and after the hurdle rate has been crossed. So if you see this slide, you will see that you can see three different income streams, and this is highly useful from a modeling perspective, this slide. Our various funds today, Ranjit had mentioned that we've earned income this quarter from three different funds, are sitting at different points on this timeline. Fund 4 is investing, it's building value. Fund 3 has begun exiting. Fund 2 is substantially realized. And is generating carried interest. This is why this quarter, our income comes from all of these three funds. Let me now move to slide number 14. We've spoken about the IPO. But this quarter, we will capture and through this slide, we will capture what the IPO has done to our platform. It has significantly strengthened the platform. It has put us in goal position. In terms of building a leading alternative platform, the net worth of the company has increased to 1,106 crore rupees, of which cash and liquid investments amount to 690 crore rupees as on September 26th. What this, in a very rough back of the envelope way, you can easily calculate this, translates into is a fundraising potential of approximately 8,000 crore rupees. We've used 8.4% sponsor commitment and we've calculated this 8,000 profiles. Beyond capital, the listing has strengthened three areas that drive the platform. The first is institutional fundraising because listed, transparent, and well-governed manager has the profile that both domestic and global institutions look for. Second is attracting talent because the listed platform and brand helps us attract senior talent as we build out the flagship and new strategy teams. Our currency in terms of stock becomes more valuable. The third is developing new strategies because now we have a greater ability to commit long-term capital to seed and develop them, greater ability to raise capital, greater ability to attract deals. Enhanced fundraising, superior talent, and the ability to launch new strategies, this forms the flywheel that builds a multi-strategy platform. I'll now move to slide number 15, which describes the platform that we are creating and the new funds in our pipeline. Every new strategy leverages the Gaja platform built over 20 years, our brand and our practical. Our ability to attract capital, talent, deals, our global investor and domestic LP franchise, our sector coverage and deal flow, and our team operations and governance. We've described on this slide the two funds that are in our pipeline, and both are in the market in the 2026-2027 timeframe. Fund 5 is a continuation of our established flagship strategy. We have received steady approval for seeking commitments of 2,500 crores. It will be a close-ended fund where the initial term will be 10 years, extendable by 2. The fund is making steady progress towards its capital-raising target. Please note that funds of these kinds typically take 18 months from launch to final close, but start earning management fees from their first close. Also, All subsequent investors, they are catch-up on the fee, which is they pay fee calculated from the first close, even if they come into a subsequent close. Our strategy has essentially remained unchanged, though it has evolved over years, reflecting the growth in the Indian economy, the increasing techization of the Indian economy, the increasing size of mid-market companies. We currently invest in mid-market companies, which at an entry have enterprise values of up to 2,000 crores and have the potential to scale up to, say, 10,000 crores in enterprise value, with ownership structure being either growth stage minority or participation in management buyers. Arguably, no other firm has done more management buyers than Gaja Capital. I'll come to the second one in the market. Which is the Eastgate Secondaries Fund 1, our entry into secondaries. We are seeking commitments of 1,500 crores for a fund with a close-ended term of 5 years, extendable by another 2 years. The strategy here is to provide liquidity to general partners, namely managers, of Indian private equity and venture capital funds. We are targeting list AGPs. We are targeting List A companies within these List A GPs. We will acquire stakes in portfolios of private companies. The case for East K rests on four simple points. A large cohort of maturing private equity and venture capital investments. This is generating substantial deal flow for us. A secondary market in India that is nascent and therefore an opportunity for us to be a first. This gives us considerable headroom. The ability to acquire at portfolio-level discounts, and a shorter-tenure product that can support better internal rates of return. During this quarter that we are reviewing, we've strengthened the Eastgate investment team with a senior hire who brings over 20 years of full-cycle private equity investing experience. I'm happy to report that the fund is making steady progress towards its fundraising target. With this, I'll hand over the rest of the call to Aminovgen, Partner, and CFO.

Abhinav Jain, CFO

Thank you, Gopal. We are on slide 16 now. This slide sets out the performance of each fund. Fund 4, our most recent fund, held its final close in 2023 at 1775 crore rupees and has made nine investments, two of them during the quarter. It is 87% deployed and is tracking a gross multiple of two times, which corresponds to top quartile performance for its vintage. As the fund is still under deployment, that multiple is not representative of mature fund performance. Fund 3 is fully deployed across 10 investments and partially realized, at a gross multiple of 1.9 times, and it tracks top quartile for a vintage in which industry returns were moderated by COVID-19. Fund 2 is substantially realized at 3.8 times and carried interest from fund was a significant driver of the growth in performance income for this quarter. Fund 1 is fully realized at 5.6 times. All four funds rank first quartile against their industry benchmarks.

Ranjit Shah, Chairman

We now move to slide 17.

Abhinav Jain, CFO

I would like to draw your attention to slides 18, 19, 20, which set out the quarterly, half-yearly, and trailing 12-month income statements in full. You will also see a snapshot of the balance sheet on slide 21. On slide 17 are the key financial highlights, and I'll take you through those one by one. First, total income. For the quarter, it was 65.5 crore rupees, up 26% on first quarter. And for the half year, 117.3 crore rupees, up 6% on the first half of last year. Second, profit after tax. For the quarter, it was 64.7 crore rupees, up 138% on first quarter, and 54% on the same quarter last year. For the half year, it was 91.9 crore rupees, up 48%. Third, the net worth. As at 30th September 2026, it stood at 1106 crore rupees, including the IPO proceeds, against 574.6 crore rupees a year ago, an increase of 92%. Fourth, performance income. It was 46.2 crore rupees for the quarter, a growth of 55% over the first quarter, with carried interest earned from fund 2 being an important contributor. For the half-year, it was 75.9 crore rupees against 78.5 crore rupees in the first half of last year, reflecting the timing of realizations in the two periods. Fifth, the cost-to-income ratio. For the half-year, it was 29 percent, down from 38 percent as total expenses fell 17 percent from 41.6 crore rupees to 34.6 crore rupees, while income grew 6 percent. Sixth, the tax. The consolidated results for the quarter include a reversal of a deferred tax charge of 15 crore rupees that Gopal described earlier. It arises from a revised estimate of potential tax liability on fair value gains of our sponsor commitments. Profit before tax, which it does not affect, grew 13% in the quarter and 20% in the half-year. Seventh, earnings per share. Androlyte's EPS for the half year was 15.1 rupees on a weighted average share count up 38% from 11 rupees.

Ranjit Shah, Chairman

I will now turn to balance sheet on slide 21.

Abhinav Jain, CFO

Total asset stood at 1176.5 crore rupees as of 30th September 2026 against 677.1 crore rupees a year ago. Non-current investments, which are mainly our sponsor commitments in the fund, rose 34% to 459.6 crore rupees. Cash and bank balances rose to 450 crore rupees and current investments to 165.4 crore rupees. Net worth was 1106.2 crore rupees against 574.6 crore rupees a year ago and 665 crore rupees as at 31st March 2026. Warrants are fallen from 33.5 crore rupees to 0.2 crore rupees, so we are nearly debt free. Flight 22 contains some key financial ratios. Return on equity for 12 months to September 26 was 13% against 19% a year ago. The IPO proceeds were on the balance sheet for only 5 weeks of the period and are currently earning treasury returns rather than fund returns. This moderates the ratio until the capital is deployed into sponsor commitments. Booked value per share rose from Rs.49.7 to Rs.77.4, a growth of 56%, reflecting both retained earnings and primary capital rates at the IPO. Earnings per share for trading 12 months on a weighted average basis rose from Rs.7.8 to Rs.9.3, a growth of 18%. I will now cover lastly the slide on use of proceeds. Slide 23 shows the use of proceeds against the objects of the fresh issue of 450 crore rupees. 372 crore rupees was earmarked for sponsor commitments to fund 4, 5, and each state secondaries fund 1, and 78 crore rupees for general corporate purposes. As of 30th September 2026, approximately 10% of sponsor commitment allocation and approximately 80% of the general corporate purposes allocation has been utilized. The sponsor commitment capital will be drawn as a new fund's close and call capital, and until then, it is held in treasury. I would now like to invite Ranjit to say the closing remarks.

Ranjit Shah, Chairman

Thank you, Abhinav. So, I'd like to close with four takeaways. Firstly, in the first half of FI 2627, we earned a total income of 117.3 crore rupees and PAT of 91.19 crore rupees. Income came from three of our funds. Profit after tax grew 48% over the first half of last year, and the board has declared an interim dividend of 50 per share, following a 15% dividend for FI 2526. Second, we have strengthened the balance sheet. Net worth now stands at 1,106 crore rupees and we carry no debt. Third, our balance sheet now earns treasury income, a fourth pillar of growth alongside management fees, carried interest, and gains on sponsor commitments. And fourth, a significant part of our net worth is in cash and liquid investments. which gives us a greatly enhanced capacity to raise new funds, and Fund 5 and Eastgate are making steady progress towards their targets. With that, we would now be delighted to take your questions.

Operator

Thank you. We will now begin the question-answer session. Participants who wish to ask a question may press star and 1 on your touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We have the first question from the line of Sharan Glee from IN360. Please go ahead.

Sharan Glee, Analyst — IN360

Yeah, hi, sir. Thanks for the opportunity and congratulations for the great set of numbers, and especially during the difficult phase of this market. Sir, I just wanted to know on LTM numbers, fee income stands at 61 crores, and it does not cover the opex of 63 crores. So, the fee business runs on roughly break-even and all profit comes from the carry. So, I just wanted to note two things. One is, is the point three above... So, is the fund 3 above its hurdle today? And the second question is, if not, then gross exit of multiple on investor capital, does it need before you earn your first rupee of carry? Thank you.

Gopal Jain, CEO

So, first of all, let me explain that we don't book carry on an accrual basis. Some firms do that. But Gaja Capital does not. We only hope carry on a realized basis. So the IRR of the fund does not matter. What matters is where is the fund in terms of liquidating that particular multiple on invested capital. The first fund has to return its principal. It has to return its hurdle. And then Gaja Capital starts earning carry. Let's take your questions one by one. Let's go to slide number 20, where the LTM numbers are. The first point was, does our fee income broadly cover our expenses? Our fee income is 61.3 crores, our total expenses are 63.4 crores. I'd say they roughly cover that. If you take fee income plus treasury income, you will see that it significantly covers the total expense of the company. Performance income is in two parts. Sponsor gain, which is the gain we earn from our sponsor commitments, and carried interest, which I explained is only on a realized basis. Currently, we are earning carried interest from fund two. We expect we are in a transition phase where we come to the end of fund two. We are earning sponsor gain from fund three and fund four. And we are making a transition where over the coming years we will start earning carried interest from the subsequent funds.

Gopal Jain, CEO

Hope this answers your question.

Sharan Glee, Analyst — IN360

Yeah, yeah. Thank you.

Operator

Thank you. Participants who wish to ask a question may press star and one on your touchtone telephone. Participants who wish to ask a question may press star and one on your touchtone telephone. Participants who wish to ask a question may press star and 1 on your touch-tone telephone. We have our next question from the line of Aman Agarwal from one of financial consultants. Please go ahead.

Aman Agarwal, Analyst — One of Financial Consultants

Hi, thanks for the opportunity. The question was more on the investment engine side itself. I just wanted to get your views on, you know, from where you sit, where you're seeing the most interesting investing opportunities in India, and where you are putting money. Could you give us a sense of your portfolio in terms of what we are going to the table for these companies, and talk a bit about where you think India is heading, and what your worldview is with respect to this?

Imran Jaffer, Other

Thank you, Aman. There's a lot in that question. But let's just remind you about where the funds invest. So like I mentioned when we were talking about the key differentiators, our opportunity set is mapped to four sectors. Intelligent software, automation, deep tech, and AI is one sector where we see a lot of opportunity growth, opportunity set growth. The second is financial services. The third is consumer. And the fourth is triple E, or Education, Employment, and Employability, slide number 10. This is slide number 10. So if you look at this opportunity set, we have roughly 2,300 companies mapped to these sectors that I just described in our database. This is roughly growing at 25% every year. But the newer parts of this opportunity set, which is deep tech and AI, intelligence, software, and automation, are growing at twice the rate, largely driven by the activity at earlier stages, by early stage venture capital, but also the entrepreneurial activity we see in those sectors. So that's where we have invested in Fund 4, and that's where we expect to invest in Fund 5. I hope I've answered your question.

Gopal Jain, CEO

You asked a question on worldview. We really invest in India. We think India is an independent asset class. Of course, it is integrated with the rest of the world. And for the longest time, for close to 25 years, we believed that you prosper by investing in India. So, in fact, many members of our team have been investing for, I've been investing for 35 years, and every time the market gives us an opportunity to buy India, we just buy more of India. So, we've been a perennial bull on India, and this strategy has served us very well. We are perennially looking for high-quality assets to buy at fair prices and partner with good management teams. India is growing at, say, a nominal rate of 11-12%, but really what we are seeing through our companies, which are at the front edge of many of their sectors, are much higher growth rates. We are seeing the emergence of an innovation economy, and this is the reason why we are really excited as we come closer to begin investing from our new funds.

Ranjit Shah, Chairman

Thank you. Any further questions, Amman?

Aman Agarwal, Analyst — One of Financial Consultants

No, that answers my question. Thank you.

Operator

Thank you. Participants who wish to ask a question may press star and one on your touchtone telephone. Participants who wish to ask a question may press star and one on your touchtone telephone. As there are no further questions from the participants, I now hand the conference over to the management for closing comments.

Ranjit Shah, Chairman

Thank you, Myron. And since there aren't any further questions at this time, we will close this call. But we, as a management team, look forward to interactions with investors, and we hope that we can communicate our business as we move along and as we grow. Thank you so much.

Operator

Thank you. On behalf of GAJA, Alternative Asset Management Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.