Realising the high growth potential the Indian SME sector offers a host of international PE funds are coming to India to make equity and equity related investments in the SMEs.
Latest to join the list is the APF-I (fund) with a corpus of $100 million (aproximately Rs 392.80 crore).
The India-dedicated PE fund would assist in the development of SMEs in India by providing the much needed equity capital and professional management advice.
According to information available, the fund which is going to be managed by Mauritius-based Horizon Advisors with Mumbai-based Ambit Pragma Ventures Pvt Ltd as the investment advisor, would make equity and equity-related investments towards expansion capital in high growth, small and medium enterprises (SMEs) including those located outside the main Indian metro cities.
In fact, of the total corpus, multilateral funding agency IFC is expected to make an investment of $15 million (Rs 58.92 crore) or 20% of the commitments.
Earlier in November, Mauritius-based Frontline Strategy launched its $200 million (Rs 785.60 crore) India Industrial Growth Fund (IIGF).
The fund would make PE investments in India?s small and medium enterprises. It would target companies that are in the early stages of the PE investment space, primarily in the industrial space and with revenues between Rs 20 crore and Rs 100 crore.
Iceland-based investment bank Askar Capital also planned for a 50:50 investment fund with Nikhil Gandhi-promoted SKIL Group to set up a $500 million private equity fund (Rs 1,964 crore). The plan was part of its initiative to enter the Indian PE market with a special focus on the SME sector.
Domestic players are not lagging behind either. In fact, public sector SME lender, Small Industries Development Bank of India (SIDBI) floated a PE fund sometime back with an initial corpus of Rs 100 crore to help its existing customers to expand their operations. The fund was formed on a private equity model fund and the average deal was to be in the range of Rs 5 crore.