IIFL SPECIAL OPPORTUNITIES FUND - SERIES 2

(A scheme of IIFL Opportunities Fund – Category II Alternative Investment Fund)

All data are as on October 31, 2020 and denominated in INR

Investment Theme Portfolio holding vs Performance (Since Inception) Sector - Holdings

The scheme seeks to generate long term capital
appreciation through investment in Equity and Scheme/Benchmark Listed (%) Unlisted (%) Overall (%)
Equity related instruments of to be listed
% of portfolio holding 40.83 44.86
companies. The fund aims to provide individual
investors the opportunity to participate primarily Scheme Returns (XIRR) 12.96 1.03 4.81
in IPO and Pre-IPO events as institutional
investors. S&P BSE IPO TRI 12.67
Fund level returns are shown in the above table; Past performance may or may not be
Key Terms Financial Services sustained in future;
Returns are as of October 31, 2020
Launch Date July 13, 2017
Distributions
Bloomberg Ticker NA Payout - ICICI Lombard Gen. Insurance 0.75

Scheme Closed Ended Scheme Income Distribution 0.49

Category II Alternative Total Distributions 1.24

Category
Investment Fund
NAV - Oct 2020 10.94
Benchmark Index S&P BSE IPO TRI
Adjusted NAV 12.18

Fund Details - as on October 31, 2020

Committed Capital Type of Investment Market Capitalization
1475.42
(INR in Cr.)
Drawdown Capital
1475.42
(INR in Cr.)
NAV - Fund Level
10.9434
(INR)*
* Refer the second point of the note section
Schedule of Charges
Class A Units - units offered
by the Fund and
subscribed by Investors
(further sub classified into Calculation on the basis of current portfolio value
Class A1, A2, A3 and A4),
Class B Units- Units offered Current Portfolio Holdings
Class of Units by the Fund and S. No. Company Weightage
subscribed by IIFL Group
or such other persons as Listed Portfolio Holdings 40.83%
nominated by Sponsor / 1 NIPPON LIFE ASSET MANAGEMENT LIMITED 8.42%
Co-Sponsor involved in
management, distribution 2 SBI LIFE INSURANCE COMPANY LIMITED 7.75%
or advise to the Fund. 3 ICICI LOMBARD GENERAL INSURANCE COMPANY LIMITED 4.83%
Class S (Sponsors) - 0.10% 4 HDFC LIFE INSURANCE COMPANY LTD 4.57%
Management
Class A1 - 2.00% 5 CREDITACCESS GRAMEEN LIMITED 2.34%
Expenses (as % of
Class A2 -1.75% 6 YES BANK LIMITED 2.00%
daily net assets
Class A3 - 1.50%
p.a.) 7 INDIAN ENERGY EXCHANGE 1.65%
Class A4 - 1.00%
Upto 0.15% p.a. of daily net 8 BANDHAN BANK LIMITED 1.34%
Admin. Expenses 9 EQUITAS SMALL FINANCE BANK LIMITED 1.11%
assets
Upto 2.00% of Aggregate 10 RBL BANK LIMITED 1.10%
Set up Fee
capital commitment 11 TCNS CLOTHING CO. LIMITED 0.82%
Internal Rate of Return of 12 MINDSPACE BUSINESS PARKS REIT 0.77%
Hurdle Rate
10% p.a.** 13 UTI ASSET MANAGEMENT COMPANY LIMITED 0.76%
10% of return over and
14 IRCON INTERNATIONAL LIMITED 0.64%
above the Hurdle Rate
without catch-up for Class 15 UJJIVAN SMALL FINANCE BANK LIMITED 0.61%
Performance Fees 16 CAPACITE INFRAPROJECTS LIMITED 0.60%
A1, Class A2, Class A3 and
Class A4 investors (as 17 VARROC ENGINEERING LIMITED 0.45%
detailed in PPM) 18 ANGEL BROKING LIMITED 0.39%
**Refer the third point of the note section 19 GALAXY SURFACTANTS LIMITED 0.35%
Investment Manager 20 STERLING AND WILSON SOLAR LIMITED 0.32%
IIFL Asset Management Limited (IIFL AMC) Unlisted Portfolio Holdings 44.86%
21 NATIONAL STOCK EXCHANGE OF INDIA LIMITED 16.99%
Fund Manager Profile 22 NSDL E-GOVERNANCE INFRASTRUCTURE LIMITED 10.90%
-Dr. Rahul Salvi 23 NORTHERN ARC CAPITAL LIMITED 5.69%
Dr. Rahul Salvi is an alumnus of JBIMS with an 24 NAZARA TECHNOLOGIES LIMITED 4.86%
MBA in finance and working with IIFL since 2011. 25 BIKAJI FOODS INTERNATIONAL LIMITED 3.36%
Dr. Rahul in his prior assignment was involved in 26 NATIONAL SECURITY DEPOSITORY LIMITED 1.55%
identifying opportunities in the Pharma, 27 PARKSONS PACKAGING LIMITED 0.76%
Technology, Hospitals and midcap space in the 28 CDE ASIA LIMITED 0.75%
Indian stock markets and also handling a few key
client portfolios by developing alternate equity 29 CASH AND CASH EQUIVALENTS 14.31%
strategies for clients to generate portfolio alpha. Total 100.00%
Prior to that he has had a brief stint in a boutique Calculated on the basis of current portfolio value
investment banking firm based out of Mumbai. Cash and Cash Equivalents includes investments in bonds, debt mutual funds, cash balance and other receivables.

PRIVATE AND CONFIDENTIAL. NOT MEANT FOR PUBLIC CIRCULATION

IIFL Asset Management Limited (Investment Manager)
Regd Off: 6th Floor, IIFL Centre, Kamala City, Senapati Bapat Marg, Lower Parel, Mumbai -400 013
Tel: (91-22) 4876 5600 • Fax: (91-22) 4646 4706 • CIN: U74900MH2010PLC201113 • SEBI AIF Category II Registration No: IN/AIF2/12-13/0015
 IIFL SPECIAL OPPORTUNITIES FUND - SERIES 2
(A scheme of IIFL Opportunities Fund – Category II Alternative Investment Fund)
All data are as on October 31, 2020 and denominated in INR

Portfolio Details (Top 5 Holdings)

1. National Stock Exchange of India Limited (NSE) 4. SBI Life Insurance Company Limited

National Stock Exchange (“NSE”) has dominant position and had a market share by total turnover SBI Life holds the distinction of being India’s largest private life insurer in terms of New Business
of 94% in equity cash trading, 100% in equity futures and options trading and 72% in currency Premium (“NBP”) generated in each fiscal year from FY10 to FY20 with 23.9% market share in
futures trading for Q1FY21. Q1FY21 (up from 20.5% in FY20). Bancassurance network continues to be a strong source for the
Company with 65% of the total APE being through that channel. It has wide spectrum of offerings
Its operating income increased 31% YoY in Q1FY21 to ₹1,074 Cr. on the back of 57% growth in covering individual and group customers.
transaction income to ₹803 Cr. (₹513 Cr. in Q1FY20).
Gross written premium increased 14% YoY to ₹7,643 Cr. AUM increased from ₹1.4 Tn. In June 2019
The Company has improved its cost efficiencies, with the EBITDA margin increasing to 77% (from to ₹1.7 Tn. in June 2020. In􀏐lows into the Company have also increased from ₹33.1 Bn. in Q1FY20
72% in Q1FY20). EBITDA was ₹970 Cr. up from ₹679 Cr. in Q1FY20. PAT increased from ₹426 Cr. to ₹38.6 Bn. in Q1FY21. Market movement of ₹88.3 Bn. Contributed to a total of ₹149.9 Bn. increase
(45%) in Q1FY20 to ₹706 Cr. (56%) in Q1FY21. in AUM from March 2020 to June 2020.

The 13th Month persistency decreased from 84.5% in Q1FY20 to 81.6% in Q1FY21 while the 61st
2. NSDL e-Governance Infrastructure Limited Month persistency increased from 56.3% in Q1FY20 to 63.1% in Q1FY21. Surrender ratio has also
decreased from 3.8% in Q1FY20 to 1.8% in Q1FY21. PAT grew by 5% to ₹391 Cr. in Q1FY21
NSDL e-Gov is engaged in providing IT enabled e-Governance Services, inter-alia comprising Tax compared to ₹372 Cr. in Q1FY20. The Company has a strong Solvency ratio of 2.39x in June 2020.
lnformation Network (TIN), Central Recordkeeping Agency (CRA) for National Pension System,
acting as a Registrar for Unique Identification Authority of India (UlDAl) including providing
AADHAAR authentication services as Authentication Service Agency (ASA) and e-KYC services as
KYC Service Agency (KSA). 5. Northern Arc Capital Limited

The Company’s income fell by 43%, from ₹188 Cr. in Q1FY20 to ₹107 Cr. in Q1FY21. It reported a Northern Arc Capital Limited (“NACL”) is a non-banking financial company setup with the
PAT margin of 9.6% in Q1FY21. The fall in income was primarily due to fall in the Volumes of PAN objective of bridging the gap between companies who serve financially excluded customer
card issued during the lockdown period. We expect the same to recover as the lockdown impact segments (Originators) and debt capital markets. The Company focusses on MFI sector (where,
withers away. besides providing loans, it pioneered various instruments including Tier II Bonds, securitization,
assignment and credit enhancement structures), Small Business Lending, Affordable Housing
Finance, Vehicle Finance, Agri Finance, Corporate Finance and Consumer Finance.
3. Nippon Life India Asset Management Limited Its revenue includes fee income from disbursements it enables in the form of loan syndication,
securitization, assignment and guarantees and interest income from exposure it retains on its
Nippon Life India Asset Management (“NIAM”) offers strategies across mutual funds, pension balance sheet in various deals. It also manages alternative investment funds (AIFs) which invest
funds, managed accounts, alternative investments, and offshore funds. In September 2019, Nippon in credit securities of financial companies in above sectors.
Life Insurance completed a 75% acquisition of stake in Reliance Mutual Fund and it became a The Company has a gross loan book of ~₹3,769 Cr. with gross NPA of 1.14% as at 30 June 2020.
subsidiary of Nippon Life. In October 2019, Reliance Mutual Fund was renamed as Nippon India The total income increased by 7.2% from ₹158 Cr. in Q1FY20 to ₹169 Cr. in Q1FY21. It generated
Mutual Fund and Nippon Life became the sole sponsor of Nippon India Mutual Fund. Nippon Life profit after tax of ₹26 Cr. during the quarter and has a comfortable DE ratio of 1.7 with a CRAR of
(a Fortune 500 company) is Japan’s largest private life insurer and one of the largest in the world. 36%.
The Company has made significant progress on the technological fronts to originate loans and
The Company had ₹2.74 Tn. AUM on 30 June 2020. This included ₹1.88 Tn. from the mutual fund create benefits in terms of turnaround times, efficiency, integrity of data, customer engagement
business. The average AUM (“AAUM”) reduced by 12% from March 2020 to June 2020. This was and new opportunity creation.
on the back of falling AUM in the equity schemes where the AAUM reduced from ₹1.1 Bn. in March
2020 to ₹871 Bn. in June 2020. However, the Company still witnessed a net inflow of ₹10 Bn. in
Q1FY21.

Revenue for the Company decreased by 7% from ₹360 Cr. in Q1FY20 to ₹336 Cr. In Q1FY21. This
was primarily due to the MTM impact of ~₹340 Cr. on the equity portfolio. For Q1FY21, digital
purchase transactions increased to 0.5 million, an increase of 43% QoQ. Digital channel
contributed 56% to total new purchase transactions. This is reflected in the Company reducing its
total operating expenses by 24% and employee costs by 13%. PAT increased by 25% to ₹156 Cr.
from ₹125 Cr. in Q1FY20.

Fund Commentary

Market Update:

• The first half of October was relatively less volatile (VIX remaining close to 20). However, as Covid cases surged in Europe and US, and countries in Europe imposed lockdowns, market
volatility picked up in the second half of October (with VIX creeping up to 25 by month-end). Due to the upcoming US elections, volatility is expected to remain elevated.
• Given the pickup in volatility, it was not surprising to see better performance for lower volatility stocks in October. On an overall basis, Nifty and Sensex both increased by 3.5% and 4.1%
respectively during the month.
• In India, we continue to see recovery on both economic and Covid- 19 fronts. Amidst falling active cases and a decline in the daily number of new cases, most economic indicators have
improved.
o Covid improvement:
Barring a few states, we are better placed now as compared to where we were in August. Number of daily new cases continued to decline, and recoveries continued to be higher
than new cases, leading to a reduction in active cases.
Kerala, Delhi and West Bengal are the states with the highest growth rate in the number of cases. Most large urban districts (except Delhi) saw a decline in the number of new
cases during the end of October.
o Economic indicators:
The improvement in September GST revenues (collected in October) is a positive — reflecting improvement in economic activity, some normalization in activity/demand
(including festive demand) and impact of unlocking.
Google mobility reports show that the number of visits to grocery stores are already back at pre-Covid level.
Car registrations were up in the first twenty days of October, while two-wheeler registrations were down.
Maharashtra’s property registration numbers continue to be strong.

Primary Market Update:

• We saw 4 IPOs in October 2020: UTI Asset Management Company, Mazagon Dock Shipbuilders, Likhitha Infrastructure and Equ itas Small Finance Bank.
• UTI AMC’s ₹2,160 Cr. IPO was oversubscribed 2.3 times (3.3x for the QIB portion). However, there was a listing day loss of 14%.
• Mazagon Dock Shipbuilders’ ₹444 Cr. IPO was oversubscribed 157.4 times (with 89.7x for the QIB section). The stock witnessed 19.3% listing day gains.
• Equitas SFB’s ₹518 Cr. IPO was subscribed 2x (3.9x for the QIB portion) and ended its listing day flat at around the issue price.

PRIVATE AND CONFIDENTIAL. NOT MEANT FOR PUBLIC CIRCULATION

IIFL Asset Management Limited (Investment Manager)
Regd Off: 6th Floor, IIFL Centre, Kamala City, Senapati Bapat Marg, Lower Parel, Mumbai -400 013
Tel: (91-22) 4876 5600 • Fax: (91-22) 4646 4706 • CIN: U74900MH2010PLC201113 • SEBI AIF Category II Registration No: IN/AIF2/12-13/0015
 IIFL SPECIAL OPPORTUNITIES FUND - SERIES 2
(A scheme of IIFL Opportunities Fund – Category II Alternative Investment Fund)
All data are as on October 31, 2020 and denominated in INR

Notes:
1. In accordance with Regulations 10 (d) of AIF, IIFL Wealth Finance Limited (Co- Sponsor) has invested Rs. 5 Crore in the Scheme. Additionally, IIFL Wealth Finance Limited has invested Rs. 3.6 Crore in the
scheme under share class A1.
2. NAV mentioned in the factsheet is the fund level NAV and factors in all income & expense incurred/accrued. Kindly get in touch with Investor Relation for NAV of your respective share class.
3. Post tax post expenses Internal Rate of Return of 10% p.a. (on CAGR basis) on net capital contribution from the date of allotment for Class A1, Class A2, Class A3 and Class A4 investors (as detailed in PPM).
4. The Scheme is fully drawn down.
The data stated herein is as of October 31, 2020 , unless specifically stated.

Disclaimer:
Securities investments are subject to market risks and there is no assurance or guarantee that the objectives of the Fund will be achieved.
As with any securities investment, the value of a portfolio can go up or down depending on the factors and forces a ffecting the capital markets. Past performance of the Fund Manager or AMC may not be
indicative of the performance in the future. This document is for informational purposes only and should not be regarded as a n offer to sell or as a solicitation of an offer to buy the securities or other
investments mentioned in it. The past performance of the Fund is not indicative of the future performance of the Fund or in any other Fund either existing Fund that may be offered. Investors are not being
offered any guaranteed or indicative returns through these services. The returns mentioned anywhere in this document are not promised or guara nteed in any manner. Returns are dependent on prevalent
market factors, liquidity and credit conditions. Instrument returns depicted are in the current context and may be significantly different in the future. The contents of this document should not be tr eated as
advice relating to investment, legal or taxation matters. This communication is for private circulation only and for the e xclusive and confidential use of the intended recipient(s).
Any other distribution, use or reproduction of this communication in its entirety or any part thereof is unauthorized and str ictly prohibited. All investors must read the detailed Private Placement
Memorandum (PPM) including the Risk Factors and consult their stockbroker, banker, legal adviser and other professional advisers to understand the contents of this document and/or before making any
investment decision/contribution to AIF.
The securities market information contained in this document is obtained from sources believed to be reliable. We do not represent that any securities market related information, including any third party
information, is accurate or complete and it should not be relied upon without proper investigation on the part of the investor/s
IIFL Asset Management Limited and its group, associate and subsidiary companies are engaged in providing various financial se rvices and for the said services (including the service for acquiring and
sourcing the units of the fund) may earn fees or remuneration in form of arranger fees, referral fees, advisory fees, managem ent fees, trustee fees, Commission, brokerage, transaction charges, underwriting
charges, issue management fees and other fees. For the purpose of trading and investments in securities, the Fund transacts through and maintain demat account(s) with G roup Company(ies).

PRIVATE AND CONFIDENTIAL. NOT MEANT FOR PUBLIC CIRCULATION

IIFL Asset Management Limited (Investment Manager)
Regd Off: 6th Floor, IIFL Centre, Kamala City, Senapati Bapat Marg, Lower Parel, Mumbai -400 013
Tel: (91-22) 4876 5600 • Fax: (91-22) 4646 4706 • CIN: U74900MH2010PLC201113 • SEBI AIF Category II Registration No: IN/AIF2/12-13/0015