FAQs
1. What is Punji Baazar?
+
Punji Baazar is a trusted platform designed to simplify and grow your investments. It offers tools, insights, and expert support to help you make smart financial decisions.
2. Are you regulated?
+
Yes, Punji Baazar works with SEBI-registered advisors and ensures compliance with all necessary financial regulations in India.
3. What services do you offer?
+
We provide investment planning, portfolio management, market insights, and a secure platform to track and manage your investments in one place.
4. How does Punji Baazar work?
+
We analyze your financial goals and risk appetite to suggest the best investment options. You can invest, monitor, and grow your portfolio directly through our platform.
5. How can I contact Punji Baazar if I need help?
+
You can reach us via email, phone, or live chat. Visit our Contact Us page for details.
6. Can NRIs invest through Punji Baazar?
+
Yes, Non-Resident Indians (NRIs) can use Punji Baazar to manage their investments, subject to RBI and SEBI regulations.
7. What is the minimum size of investment?
+
You can start investing with as little as ₹5,000, making it accessible for everyone.
8. What are your fees?
+
We offer both free and premium plans. Our premium services have a transparent fee structure, which you can view on the pricing page.
9. How do I transfer money?
+
Funds can be securely transferred via net banking, UPI, or other supported payment methods directly from your linked bank account.
10. What exactly are Alternative Investments? Why are they needed?
+
Alternative investments are assets outside traditional listed markets such as stocks, mutual
funds, bonds, and FDs. They include private equity, private debt, venture capital, special
situations, infrastructure, and real assets.
They are needed because:
- Public markets have become more efficient → alpha is harder to generate
- Large wealth needs diversification beyond listed markets
- Institutional investors globally allocate 20-40% to alternatives
At Punjibaazar, alternatives are viewed as capital allocation tools, not return gimmicks.
11. What is an Alternative Investment Fund (AIF)?
+
An AIF is a SEBI-regulated, privately pooled investment vehicle that raises money from
sophisticated investors and invests it according to a clearly defined strategy.
Key points:
- Privately pooled (not offered to the general public)
- Regulated under SEBI (AIF) Regulations, 2012
- High governance, documentation, and disclosure standards
- Minimum investment thresholds ensure investor maturity
12. How are AIFs different from Mutual Funds or PMS?
+
AIFs operate where mutual funds and PMS structurally cannot.
| Aspect |
AIF |
Mutual Funds |
PMS |
| Investor Type |
HNIs / Institutions |
Retail |
HNIs |
| Minimum Investment |
₹1 crore |
₹500 |
₹50 lakh |
| Liquidity |
Illiquid / Semi-liquid |
Daily liquidity |
Periodic |
| Market Focus |
Private + Public |
Public only |
Public |
| Strategy Flexibility |
Very high |
Limited |
Moderate |
| Behavioural Noise |
Low |
High |
Medium |
13. Why does Punjibaazar focus so strongly on AIFs?
+
Punjibaazar believes:
- Serious wealth is built outside daily market noise
- Private markets reward patience, governance, and discipline
- AIFs replicate institutional investing for private investors
We are not a trading desk and not a mutual fund pushing platform. Our focus begins
after traditional products stop adding value.
14. How many categories of AIFs are there? Which ones does Punjibaazar focus on?
+
SEBI defines three categories:
- Category I - Venture capital, SMEs, infrastructure, special situations
- Category II - Private equity, private debt, pre-IPO
- Category III - Hedge funds, trading strategies (leverage allowed)
Punjibaazar focuses ONLY on Category I & II. We avoid Category III due to trading,
leverage, and higher volatility.
15. What is a Category I AIF? Who should invest in it?
+
Category I AIFs invest in economically or socially desirable sectors, such as:
- Start-ups & venture capital
- SMEs
- Infrastructure
- Special / stressed situations
Suitable for:
- Investors with long patience
- Surplus capital
- High risk tolerance
- Asymmetric return expectations
Not suitable for:
- Liquidity-dependent investors
- First-time market participants
- Emotionally risk-averse investors
16. What is a Category II AIF and why is it preferred?
+
Category II AIFs invest in:
- Mature unlisted businesses
- Private & structured credit
- Pre-IPO opportunities
They form the core allocation for most Punjibaazar investors because:
- No leverage for investment
- Better downside control
- Clearer exit visibility
- More predictable risk-return profile
Punjibaazar treats Category II AIFs as the wealth compounding engine.
17. Why does Punjibaazar avoid Category III AIFs?
+
Category III AIFs:
- Use leverage
- Employ complex trading strategies
- Are often short-term in nature
- Behave closer to hedge funds
Punjibaazar philosophy is low drama, high discipline. Trading-heavy strategies do not
align with our long-term relationship model.
18. Who can invest in AIFs? Are retail investors allowed?
+
AIFs are meant for sophisticated investors only, such as:
- HNIs
- Ultra HNIs
- NRIs
- Family offices
- Corporates & institutions
Retail investors are not permitted.
19. What is the minimum investment amount in an AIF?
+
- ₹1 crore per investor per scheme
- ₹25 lakh only for employees/directors of the fund manager
This minimum is a filter, ensuring:
- Financial capability
- Emotional maturity
- Understanding of illiquidity
20. How much of my total portfolio should be in AIFs?
+
Punjibaazar never recommends 100% allocation. Typical guidance:
- 10-30% of total net investable wealth
- Depends on:
- Capital size
- Liquidity needs
- Risk tolerance
- Existing asset allocation
AIFs are portfolio enhancers, not replacements.
21. Can I invest borrowed money or leverage into AIFs?
+
No. Punjibaazar strictly discourages:
- Borrowed funds
- Pledged assets
- Liquidity-critical capital
AIF investments must come from true surplus capital.
22. Are returns in AIFs guaranteed?
+
Absolutely NO. SEBI regulations do not allow guaranteed returns in AIFs. Any claim of
guarantee is a red flag. Punjibaazar believes in:
- Defined risk
- Transparent structure
- Process-driven outcomes
23. What kind of returns can one expect from AIFs?
+
Returns depend on:
- Strategy
- Manager capability
- Market cycle
- Execution quality
Rather than quoting numbers, Punjibaazar focuses on:
- Risk-adjusted returns
- Capital preservation
- Long-term compounding
We do not sell return expectations - we sell frameworks.
24. What is the J-Curve effect in AIFs?
+
The J-Curve means:
- Early years may show low or negative returns
- Fees are paid before exits occur
- Value creation appears later during exits
This is normal and expected in private markets.
25. What are the key risks in AIF investing?
+
Key risks include:
- Illiquidity risk
- Business execution risk
- Valuation subjectivity
- Regulatory and tax changes
- Concentration risk
Punjibaazar ensures all risks are explained upfront, not hidden later.
26. What legal structure do AIFs use?
+
AIFs can be structured as:
- Trust (most common)
- LLP
- Company
Most Indian AIFs use trust structures for tax and governance efficiency.
27. How does capital commitment and drawdown work?
+
- Investors commit capital upfront
- Capital is drawn gradually as deals arise
- Improves IRR efficiency
- Avoids idle cash drag
You do not invest the full amount on Day 1.
28. What fees are charged in AIFs?
+
Typical fees include:
- Management fee
- Fund operating expenses
- Performance fee (carry)
Punjibaazar explains fees as the cost of professional capital management, not negotiable
commissions.
29. How does the profit distribution (waterfall) work?
+
Generally:
- Return of investor capital
- Preferred return (if applicable)
- Profit sharing between investor & manager
This ensures alignment of interest.
30. Do Category I & II AIFs have tax pass-through status?
+
Yes
- Investment income is taxed in the hands of investors
- Fund itself does not pay tax on such income
- Business income (if any) is taxed at fund level
31. Is TDS applicable on AIF income?
+
Yes
- 10% TDS for resident investors
- Non-residents as per DTAA / rates in force
Final tax liability depends on individual tax slab.
32. How often will I receive reports?
+
Typically:
- Quarterly investor reports
- Annual audited financials
- Exit-specific updates
Punjibaazar also conducts periodic review calls, not just emails.
33. What exactly does Punjibaazar do in the AIF journey?
+
Punjibaazar
- Conducts fund evaluation & due diligence
- Assesses investor suitability
- Structures allocation
- Manages onboarding
- Handles post-investment relationship
We are partners in the journey, not commission agents.
34. How is Punjibaazar different from brokers or platforms?
+
- No trading
- No hot-theme selling
- No return pushing
- Strong Punjab & Tier-2 relationship trust
- Institutional thinking with personal connect
35. What role does Master Trust play in this ecosystem?
+
The alliance combines:
- Master Trust’s client reach & platform strength
- Punjibaazar’s AIF expertise & relationship management
This creates comfort without diluting advisory independence.
36. What happens after I invest?
+
The real work starts after investment:
- Regular communication
- Performance tracking
- Portfolio rebalancing discussions
- Exit planning
Punjibaazar measures success in decades, not quarters.
37. Can I exit before fund maturity?
+
AIFs are illiquid by design. Early exit is:
- Difficult
- Not guaranteed
- Often at a discount
Hence, suitability assessment is critical before investing.
38. Is this suitable for first-time investors?
+
Only if:
- The investor understands markets
- Has surplus capital
- Accepts illiquidity
Otherwise, Punjibaazar recommends starting with simpler instruments first.
39. What is the single most important thing I should understand before investing in
AIFs? AIFs reward patience, discipline, and trust in process - not urgency, speculation,
or emotion.
+
If this philosophy resonates, AIFs may be suitable. If not, they should be avoided.
