Small & Medium Enterprises Advantage Fund (SMEAF-II)
OBJECTIVE OF THE FUND
- To promote SME segment in the Indian economy, in lines with Government's "Make in India" initiative.
- To invest in projects with high growth prospects & scalability with focus on innovation and technology.
- Investments in small and medium enterprises under the Fund would be in diversified, growth oriented and emerging sectors of the economy.
NEED FOR SUCH FUND
Micro, Small and Medium Enterprises constitute the backbone of an economy in maintaining an appreciable growth rate and in generating employment opportunities. It is needless to mention that the contribution of MSMEs to the Indian economy in terms of employment generation, containing regional disparities, fostering equitable economic growth and enhancing export potential of the country has been quite phenomenal. India is expected to emerge as one of the leading economies in the world over the next decade in the light of a positive political and economic scenario. In India, MSME are very large in numbers, diverse in type of business and are spread across remote geographies of a vast country.
To promote SME segment in the Indian economy, in lines with Government's "Make in India" initiative, IFCI Venture has floated SME Advantage Fund (SMEAF), which is a SEBI registered AIF Category -II fund.
CONSTITUTION / STRUCTURE OF FUND
Domestic Fund
SME Advantage Fund is SEBI registered AIF Category -II fund. IFCI Venture has been appointed as Investment Manager of the Fund.
SIZE OF FUND
The corpus size of the fund is INR 500 Crore with Green Shoe option of Rs. 250 Crore
TIE UP FOR FUND
IFCI Ltd. is the Sponsor and Settlor of the Fund. IFCI as a Sponsor and Investor has committed to contribute upto Rs. 50 Crore (Rs. 5 Crore as Sponsor contribution as specified under AIF Regulations and Rs. 45 Crore as the lead investor) in SMEAF. The balance fund corpus would be raised from other financial institutions/banks/companies/multilateral agencies and foreign investors
LIFE OF FUND
8 years with two prolongation options of 1 year each
INVESTMENT FOCUS
The investment under SMEAF shall be made in Indian manufacturing and services companies engaged in the following segments:
- Growth oriented, government focused and sunrise sectors of the economy such as:
- Auto-Component
- Light and Medium Engineering
- Chemical
- FMCG products
- Pharmaceutical
- IT & ITeS
- Defence
- Electronics & EMSD
- Telecommunication
- Food Processing & Agro products
- Petro-chemicals
- Logistics & transportation
- Biotechnology
- E-governance
- E-learning
- Healthcare
- Energy efficiency
INVESTMENT CRITERIA
The Investment Criteria for investment under SMEAF is as under:
- The investment under SMEAF would generally be made in companies promoted by professionally qualified and/ or experienced promoters. The promoters/companies should have assimilated the project/process/ technology and can establish commercial viability of venture.
- The investments will generally be made in companies proposing to either manufacture / deliver critical products/ services or have unique critical business processes.
- The investee companies should propose to set up projects as per well-conceived/developed business plan.
- The Investment will be preferred in late start-up companies undertaking expansion of business.
- The investments will be made in Indian companies qualifying the objective of the fund. Such Indian companies may also include small and medium enterprises with prospects for accelerated growth and generating high returns on investment.
- The investee companies with features such as Global competence, Corporate Governance, etc. would be preferred for investment under the fund.
- The companies should be in position to provide exit from investment in a period of 5-6 years.
- The investment will generally be linked to a specific business project of the company.
- The investments under SMEAF will be made as per limit prescribed under SEBI Regulations.
INVESTMENT STRATEGY
