Govt-backed SRI Fund commits Rs 5,000 cr to help MSMEs with growth capital

Government-backed Self Reliant India Fund (SRIF) on Friday announced that it has committed over Rs 5,000 crore to help small businesses with growth capital in its first year of operations.

The fund, which started as part of the government's flagship 'Atmanirbhar Bharat' programme, has provided approvals to 38 'daughter funds' with a commitment amount of more than Rs 5,000 crore, as per an official statement.

It has a 'Mother Fund-Daughter Fund' structure wherein SRIF, the mother fund, invests up to 20 per cent of the corpus of the Daughter Fund, which raises the balance 80 per cent of the capital from outside sources, it explained.

The arrangement is designed to maximise the fund flow to the target micro, small and medium enterprises (MSME) sector as the contribution from SRIF gets leveraged five times, taking the total value of investible funds into MSMEs to Rs 50,000 crore.

Amitava Chatterjee, the managing director and chief executive of SBI Capital Markets, said the fund has already helped provide equity funding of more than Rs 2,300 crore to more than 125 MSMEs across sectors, such as climate, agriculture, defence, education, pharma and industrials.

The statement said the Rs 2,300 crore of investments have already helped in supporting employment to 20,000 people.

Daughter Funds empanelled with SRIF include TATA Capital Healthcare Fund, Aavishkaar India Fund, SVL-SME Fund, Gaja Capital India Fund, Avaana Sustainability Fund, ICICI Ventures' India Advantage Fund S5 I, Omnivore Agritech and Climate Sustainability Fund 3, Fireside Ventures Investment Fund III, Nab Ventures Fund 1, Maharashtra Defence and Aerospace Venture Fund, it said.

SRIF is launching a technology platform to establish a transparent and standardised procedure for Daughter Funds to seek investments, which will also assist in compliance and reporting for statutory and administrative purposes.

The fund has been set up by the central government under the aegis of the Ministry of MSME and is anchored by NSIC Venture Capital Fund (NVCF), a 100 per cent owned subsidiary of The National Small Industries Corporation (NSIC). SBICAP Ventures Limited is the Investment Manager of the Fund.

"The successful first year anniversary of SRIF augments the Government of India's efforts in expanding and diversifying mobilisation of capital for MSME businesses. An increased capital pool will definitely help enterprises reach their full potential and graduate beyond the MSME bracket and become national/international champions," NSIC's chairman and managing director Gaurang Dixit said.