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Venture Arm of SBI Capital Launches ₹400 Cr Fund Focused on SMEs

SBICAP Ventures Ltd (SVL), an alternative asset manager and a wholly owned subsidiary of State Bank of India’s SBI Capital Markets Ltd, is seeking to raise a corpus of ₹400 crore for SME Fund to address the equity gap in the Small & Medium Enterprises (SME) sector in India.

While the gap in debt funding to SMEs is increasingly being bridged by Non-Banking Financial Corporates (NBFCs), there continues to be a significant gap in the equity funding for the sector despite the steep growth rate, State Bank of India’s step-down subsidiary SVL said in a statement.

“The SME landscape is expected to grow rapidly over the next few years and as per IFC, it is estimated to account for over 40 per cent of the GDP by 2020. Bridging the equity gap in the SME sector is, therefore, crucial for the overall economic development of the country and hence SVL’s launch of the SME Fund, the statement said.

Notably, in 2015 SVL had launched a fund named Neev Fund, which is the outcome of a partnership between State Bank of India and UK’s Department for International Development (DFID). The fund has invested in companies such as Milk Mantra Dairy Pvt. Ltd, an Odisha-based manufacturer and marketer of milk and milk-based products; cold chain logistics solutions provider Crystal Logistic Ltd and wind energy producer United Sustainable Energy India Pvt. Ltd.

Last month, SVL has made an investment through its NEEV Fund in RAHI Care Private Limited, a leading dialysis company.

Besides, SVL is also launching a private equity fund for providing a stimulus to improving the availability of affordable housing in India. In the initial phase, the focus of the fund will be in eight cities of the country which are amongst the most active real estate markets in India.

Varsha Purandare, Managing Director & Chief Executive Officer, SBI Capital Markets Ltd, said,“With these two new funds, we are looking forward to strengthening our foothold in the economically and socially relevant sectors. These funds shall be an effective tool in addressing the equity gap in the SME sector and in improving the availability of affordable housing in India.”

In last couple of months, a lot of local and foreign entities are coming up SME and MSME-focussed funds for India. Last week, India unit of China’s largest bank, the Industrial and Commercial Bank of China (ICBC), had announced the launch of US$ 200 million fund (~ ₹ 1,442 crores) for investing in the promising Indian micro, small and medium enterprises and startup ventures.

This month only, Small Industries Development Bank of India (Sidbi), had launched an online portal to offer In-Principle approval for MSME loans up to INR 1 Crore in 59 minutes.

Source: IndianWeb2

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