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City-based GVFL Limited (formerly known as Gujarat Venture Finance Limited) launched Rs 600 crore MSME Fund, namely Value Multiplier Fund, eyeing investments in start-ups and MSMEs in the early growth stage.
"The fund will focus on the technology start-ups and non-technology MSMEs in the early-growth stage. So far we have received interest from several international and domestic investors to invest in the fund," said Mihir Joshi, President & CEO, GVFL.
International investors from Singapore and local domestic financial institutions including Banks have shown interest to invest in the fund. The size of the fund may be increased if required post Union Budget.
With an estimated internal rate of return of around 25 per cent and an investment horizon of 7-9 years, the fund would become operational over the next 4-5 months, informed Joshi.
GVFL eyes young companies with scalable business model, large target market, high entry barrier or first mover advantage, and supported by sound management team for the Fund.
The Value Multiplier Fund has received approval from SEBI as Category I (SME Fund) under AIF Regulations.
International Investors from Singapore, US, Canada, Japan & UK have expressed interest for the fund.
"Investment appetite of domestic investors is also growing. There has been tremendous optimism in investment activities in India. If country’s GDP grows at 8-9 per cent, then MSMEs are likely to grow at 18 to 20 per cent while technology led business will grow multi-fold," said Joshi.
Due to smaller scale and limited access to funding, MSMEs and start-ups have been facing several common problems related to finance as they do not have collateral, track record, and creditworthiness.
"Government's initiatives for reforms on ease of doing business, higher infrastructure spending in next 5 to 10 years, technology penetration, and growth in aspiring middle class, would increase discretionary spending multi-fold," said Joshi.
The fund will explore funding opportunities in the medical devices, affordable healthcare, education platform and delivery among others.
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