Vikas Khemani, Founder of Carnelian Asset Management, sees the current market environment as an attractive accumulation phase despite ongoing geopolitical uncertainties. As reported by Moneycontrol, Khemani believes the macro picture remains clouded by geopolitics and trade tensions, but the underlying economy is telling a different story. "This is the kind of time you look for where the clouded macro view, but improving micros, improving underlying, and the valuations have corrected," Khemani said in an exclusive interview. He estimates that market valuations have fallen from around 24-25 times earnings to roughly 19-20 times depending on earnings estimates, while expecting 14-15% earnings growth in FY27. The fund manager believes "this vintage will be very, very good" over the next 12-18 months, with Carnelian currently fully invested in the current market conditions.
Vikas Khemani, Founder of Carnelian Asset Management, remains committed to his decade-old thesis that India's manufacturing sector is in the early innings of a structural shift. As reported by CNBC TV18, Khemani argues that India currently derives roughly 15-16% of its GDP from manufacturing, which he expects to climb to 20-25% over the next decade - a shift he calls rare in the history of any large economy. The firm launched a dedicated manufacturing fund back in October 2020, well before the theme became mainstream, and Khemani believes the underlying story hasn't changed - if anything, it has strengthened. Two key developments over the past year and a half have added fuel to this trend: the US tariff dispute pushing India to negotiate free trade agreements with other countries, opening access to markets worth a combined $1.5 trillion, and the rupee falling 14-15% against currencies of India's major trading partners following the West Asia conflict.
Carnelian Asset Management & Advisors Private Limited has launched the Carnelian Private Growth & Innovation Fund, a Category II AIF targeting ₹2,000 crore with a ₹800 crore green-shoe option. As of January 2026, the Mumbai-based boutique investment firm manages approximately ₹9,101 crore in assets under management, founded in 2019 by Vikas Khemani, Manoj Bahety, and Swati Khemani. The fund operates on a QGARP (Quality Growth at Reasonable Price) framework, integrating proprietary forensic analysis to identify structural winners and avoid "accounting pitfalls."
Vikas Khemani, founder and CIO of Carnelian Asset Management, has outlined a comprehensive framework for navigating India's small- and mid-cap universe in a recent episode of The Wealth Formula with N Mahalakshmi. According to reports from Moneycontrol, Khemani brings 27 years of experience in capital markets and nearly eight years of managing funds to his investment approach. The framework is designed to help investors avoid common pitfalls while capitalizing on small-cap opportunities for extraordinary wealth creation.
Khemani's approach emphasizes the importance of understanding the fundamentals of small-cap investing before attempting to chase multibagger opportunities. As reported by Moneycontrol, his framework is grounded in lessons learned from his own investment mistakes over the years. The experienced fund manager draws on his nearly eight years of managing funds to distill practical lessons that can help investors avoid common pitfalls in the small-cap segment. His approach appears to focus on systematic investment principles rather than speculative approaches, drawing on his extensive experience in managing funds over nearly eight years.
The fund targets 15-20 portfolio companies with an indicative deal size of ₹100-250 crore, focusing on innovation-led businesses across four key sectors: manufacturing (precision engineering, defence, aerospace), pharma & healthcare (CDMO, APIs, domestic pharma), consumption (rising consumerism across categories), and technology (AI beneficiaries, energy transition, recycling). The strategy allocates 50-60% to growth equity investments with a 4-5 year holding period, 20-25% to pre-IPO investments with 6 months to 2 years holding period, and 20-25% to PIPE investments with 2-3 years holding period. The portfolio is diversified across four or more sectors to manage unsystematic risk. Within manufacturing, Khemani points to several sub-sectors he's watching closely: specialty chemicals, garments, capital goods, defence, aerospace and electronics manufacturing services (EMS).
