Investor pathway to GIFT IFSC opens up, India-sponsored funds head home

AIFs head back to Indian turf

The decision of Alchemy Capital Management, a PMS provider, to migrate its offshore fund to GIFT IFSC in Gujarat is a nod to the efforts of the government, Reserve Bank of India and SEBI to expedite investors' pathway to the International Financial Services Centre.

Alchemy Investment Management LLP, an affiliate of Alchemy Capital Management, has successfully migrated its offshore fund to the IFSC at Gujarat International Finance Tec-City (GIFT City).

"We are pleased to be at GIFT IFSC in India and consider it a significant achievement towards the government’s objective of onshoring the offshore fund management industry,” said Hiren Ved, Whole-Time Director, CEO and CIO of Alchemy Capital Management.

The firm is the first to seize the opportunity and move Alchemy India Long Term Fund Ltd to GIFT IFSC.

The regime was enabled by the International Financial Services Centres Authority for India-sponsored funds and managers to redomicile to India by making it tax neutral, especially for those who established themselves abroad to cater to offshore clients.

The move is expected to make the fund structure efficient from both operations and cost perspectives.

"We look forward to expanding our service offerings in GIFT IFSC and express our gratitude to the International Financial Services Centres Authority and the Securities and Exchange Board of India (SEBI) for supporting us in our journey and making this possible,”  Ved said.

In May 2022, the RBI had greenlit the entry of sponsor investments by Indian entities by AIFs set up in foreign jurisdiction or IFSC to come to India via the automatic route.

“One of the important objectives of IFSC initiative is to bring back India centric business from offshore to onshore in GIFT IFSC,” IFSCA Executive Director (Development) Dipesh Shah said.

They were seeing great traction in various offshore business moving to IFSC and they would continue to work towards making it the preferred financial centre for international financial services, he said.

Kotak Mahindra Bank was instrumental in the process of re-domiciling Alchemy India Long Term Fund from Mauritius to India’s GIFT City. The bank issued the first-ever foreign portfolio investor (FPI) license to Alchemy’s Fund incorporated in GIFT and registered with IFSCA for relocating from its original jurisdiction to the new jurisdiction. This will be
the first FPI license issued to a fund incorporated in GIFT by any custodian bank/ Designated Depository Participant (DDP) in the country to relocate an existing fund.

“We are proud to announce the first re-domicile FPI registration. Alchemy’s India Long Term Fund would set a precedent for several other funds to evaluate the benefits of relocation and experience ease of business & operations in GIFT City,” said Sachin Samant, President, Banking & Financial Institutions Group & Structured Finance of Kotak Mahindra
Bank.