The Self-Reliant India (SRI) fund, initiated by the MSME Ministry and managed by SBICAP Ventures, has marked a significant milestone with investments reaching Rs 6,448 crore in MSMEs as of November 30, 2023. This fund, announced by the government in May 2020 as part of the Atmanirbhar Bharat package, operates with a 15-year tenure and focuses on equity infusion in MSMEs.
Fund Structure and Source
The Rs 50,000-crore SRI fund, facilitated by State Bank of India’s private equity arm SBICAP Ventures, comprises a government provision of Rs 10,000 crore, with the remaining amount sourced from private equity and venture capital funds. The fund utilizes a mother-fund and daughter-fund structure for equity or quasi-equity investments, with NSIC Venture Capital Fund Limited (NVCFL) functioning as the mother fund.
Diverse Investment Avenues
SRI, being sector-agnostic, supports MSMEs across various sectors such as agriculture, pharma, auto, and chemicals, engaged in manufacturing or services business. Notably, the fund excludes investments in gambling, self-help groups, and any illegal or unlawful activities. There are currently 48 daughter funds operating under the NVCFL, including entities like TATA Capital Healthcare Fund, Aavishkaar India Fund, SVL-SME Fund, Gaja Capital India Fund, Avaana Sustainability Fund, and ICICI Ventures’ India Advantage Fund
Achieving Target Returns
The target return for daughter funds is set at a gross Internal Rate of Return (IRR) of 12% per annum, reflecting the fund’s commitment to fostering growth and sustainability in the MSME sector. The SRI fund plays a crucial role in realizing the vision of a self-reliant and resilient India by empowering small and medium enterprises.
