Equity Infusion Under Self-Reliant India Fund Exceeds Rs. 8000 Cr benefiting 450 MSMEs: Shobha Karandlaje
New Delhi, Aug 2 (KNN) In a significant development for India’s micro, small, and medium enterprises (MSMEs) sector, the Self Reliant India (SRI) Fund has invested Rs 8,353 crore in 450 MSMEs as of June 30, 2024.
This information was disclosed by Minister of State in the MSME Ministry, Shobha Karandlaje, in a written reply to the Lok Sabha on Thursday.
Launched in May 2020, the SRI Fund, with a total corpus of Rs 50,000 crore, aims to provide equity infusion to boost the MSME sector.
The scheme’s structure involves Rs 10,000 crore from the central government and Rs 40,000 crore through private equity and venture capital funds.
The fund operates through a unique structure, with NSIC Venture Capital Fund Limited (NVCFL) acting as the mother fund, registered as a Category-II Alternative Investment Fund (AIF) with SEBI.
This mother-fund and daughter-fund structure allows for efficient channelling of investments to the MSME sector.
As of June 2024, 53 daughter funds have been empanelled, including notable names such as TATA Capital Healthcare Fund, Aavishkaar India Fund, and ICICI Ventures’ India Advantage Fund S5 I.
These daughter funds play a crucial role in identifying and investing in promising MSMEs across various sectors.
To maximize the impact of the fund, daughter funds are required to invest at least five times the amount of capital contribution received from the SRI Fund into MSMEs. This multiplier effect ensures that a larger pool of capital is made available to the MSME sector.
The SRI Fund has been designed with a long-term vision, having a 15-year tenure and a 13-year investment or commitment period. Over this period, the corpus is expected to reach Rs 50,000 crore, with Rs 40,000 crore coming from daughter funds. This extended timeframe allows for sustained support to the MSME sector.
When selecting MSMEs for investment, the fund focuses on businesses with defined growth plans and positive fund flows.
The investment criteria also consider the compound annual growth of the MSME for the previous three years, ensuring that the fund supports companies with proven track records and growth potential.
The SRI Fund’s progress represents a significant step towards strengthening India’s MSME sector, which is crucial for economic growth and job creation. As the fund continues to expand its reach, it is expected to play a pivotal role in fostering innovation, competitiveness, and sustainability among Indian MSMEs.
This investment milestone underscores the government’s commitment to supporting small businesses and promoting self-reliance in line with the broader “Atmanirbhar Bharat” initiative.
(KNN Bureau)
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