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Former bureaucrat-turned-entrepreneur Sanjay Gupta on Tuesday announced the launch of a private equity fund focused on SME sector, calling it a “new dawn for investment opportunities” in this sector.
Gupta, promoter of the Gujarat-based Cambay Hotel Group, said here that market regulator Securities and Exchange Board of India (SEBI) granted its approval last week, under Category-I AIF Fund regulations for raising funds. “The fund intends to raise a corpus of around Rs 100 crore in the next three months under its first scheme called India Aspiration Scheme (IAS) and will be dedicated to the aspirational middle classes. It is themed as ‘Let India Fly for Ever” (LIFE).
The size of fund will be Rs 75 crore with a Rs 25 crore greenshoe option. It will invest Rs 5 crore to Rs 20 crore in SMEs with turnover ranging from Rs 20 crore to 200 crore. It will not fund startups and focus on the companies on “verge of profit”.
He said the fund will approach the State Governments in Gujarat and Rajasthan, SIDBI and other agencies, as well as scout for NRIs and HNIs in India and abroad for raising the money that is expected to provide a 15 per cent return on equity. The minimum ticket size for those investing in the fund will be Rs 1 crore, he said.
The tenure of the scheme is eight years with option for extending it for up to two years. LIFE is also in talks with a major Singapore-based group for this purpose.
Asked if LIFE could invest in the promoter’s enterprises as well, Gupta said the regulations did not prohibit the asset management company to do so.
LIFE would facilitate the SMEs with the required fund as well as management support to make their business a success and earn a reasonable return for those investing in this fund.
LIFE Fund’s core focus will be to infuse surplus equity/equity-linked growth capital in profit-focused, entrepreneur-driven SMEs mainly in sectors such as healthcare, technology, hospitality and tourism, media and entertainment and agricultural technology.
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