The sign of revival in the economy has boosted investors’ interest in SME-focussed funds.
Morning Glory Capital Advisors LLP has recently closed its first tranche of ₹27 crore as part of its ₹100-crore AIF SME Growth Fund.
The fund will invest in SMEs which are listed or proposed to be listed. The tenor of the fund is for seven years from the date of final closing plus two extensions of one year each.
Manish Bansal, member of the investment committee, told BusinessLine that investors are very bullish on SME companies and the fund managed to mop up ₹27 crore in less than 100 days.
“We will invest the entire money in three-four months and go for the second round after showcasing the kind of returns that one can expect,” he said.
Other investment committee members include Dr Nilesh Khare and Kamal Kothari.
The focus of the fund would be to find good companies having turnover of ₹25 crore and above, with a maximum number of portfolio entities to 20-35 companies with ticket size of ₹3-5 crore in each portfolio entity.
Pantomath Sabrimala Investment Managers LLP recently raised about ₹40 crore to invest in SMEs listed on the exchange platform.
There are about 500 SEBI-registered alternate investment funds which focusses mainly on start-ups and large-size deals. There is a kind of vacuum when it comes to investment in SME companies, particularly the companies that are looking for growth capital through listing on the SME platform.
Small and medium enterprises had raised about ₹2,155 crore through IPOs last fiscal which was an over two-fold jump from the previous fiscal. A total of 148 companies got listed with IPOs worth ₹2,155 crore in the last fiscal, compared to 80 firms which took to the IPO route to garner ₹810 crore in 2016-17.