Fund to rope in private equity investment in SME's by providing them critical capital for growth.
SBI Capital Markets Ltd, the investment advisory arm of State Bank of India, is planning to float a dedicated small and medium enterprises (SME) fund with an initial corpus of Rs 100 crore ($21.68 million) in the next one and half years.
“The SME fund will be used to rope in private equity investment in SME, which otherwise is facing dearth of capital for furthering its business growth,” Rajeev Krishnan, executive vice president, SBI Capital Markets said on the sidelines of a seminar on SME here.
As SBI had many SME clients, this fund will definitely provide them with critical capital for growth, he added.
Small and medium enterprises in the country have not received much of interest from private equity players due to low capital base.“Many PE players enter into an enterprise in the late growth phase with visible time frame for exiting the enterprise. So, we want to rope in PE fund to invest in the growth phase of a company,” Krishnan added.
SBI Capital Markets Ltd is also betting big on advisory services and upcoming FPOs (follow-on public offers) to drive revenue growth this fiscal.
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