The Small Industries Development Bank of India (SIDBI), partnered with the Centre for Innovation, Incubation and Entrepreneurship (CIIE.CO), Indian Institutes of Management (IIM) Ahmedabad, Gujarat (IIM-A)’s startup incubator and investor, to set up a SIDBI Accelerator Fund, at IIMA’s CIIE.CO.
- The objective of establishing the Accelerator Fund is to provide support and extend seed investment to early-stage enterprises, especially for deep technologies start-ups in India.
- This collaboration is a part of SIDBI’s “India of Tomorrow” initiative, which intends to strengthen India’s developmental and funding ecosystem for early-stage start-ups.
Key People:
S Ramann, Chairman and Managing Director (CMD) of SIDBI; Prof. Chitra Singla, and Prof. Ankur Sinha from IIM Ahmedabad; S P Singh, Chief General Manager (CGM) of SIDBI, and Kunal Upadhyay, co-founder of CIIE.CO, among others were attended the event.
Funding:
i.SIDBI and IIMA’s CIIE.CO jointly established the fund with a total corpus of Rs.40 crore.
ii.SIDBI is contributing Rs.20 crore to the fund and CIIE.CO is contributing the remaining Rs.20 crore.
Key Points:
i.Through this collaboartion, SIDBI aims to enable seed funding to start-ups in exchange for equity and promote deep technologies and science-led innovation.
ii.The primary focus is to support start-ups with new and meritorious ideas, and technologies needed for India’s 2047 goal of becoming Self-reliant (Atmanirbhar Bharat) as well as a dominant player in high-quality/high-entry barrier products/ services.
iii.CIIE.CO’s investments span a broad range of sectors, with a key focus on three thematic areas: deep tech, digitisation, and climate tech.
- CIIE.CO has been recognised as a Center of Excellence by the Department of Science and Technology under the Ministry of Science and Technology, Government of India (GoI).
SIDBI Anchors Vivriti’s Rs 700 crore AIF fund for Micro-Enterprises with BBB and Lower Ratings
Small Industries Development Bank of India (SIDBI) has participated as an anchor investor in the Promising Lenders Fund (PLF) managed by Vivriti Asset Management Private Limited (VAM), a part of Chennai (Tamil Nadu)-based Vivriti Group, with an aggregate target corpus of Rs. 700 crore in two tranches.
- The fund was co-conceptualised by SIDBI and Vivriti to provide debt capital to microenterprises and build bond markets for issuers rated BBB and lower categories.
- The PLF is predicted to benefit over 8,000 micro-enterprises and 80,000 women entrepreneurs.
Note: BBB is a moderate level of default risk relative to other issuers or obligations in the same country or monetary union.
Phases of the fund:
Phase 1:
- In March 2022, the first phase of the fund (PLF-I) was launched with a fund size of Rs.300 crore. The fund reached its full investment capacity by October 2022.
- The fund has made 18 investments in 16 Microfinance institutions (MFIs)/Non-Banking Financial Companies (NBFC)s and Fintechs rated in BBB and lower categories.
- As of June 2023, contributors have already received approximately over 25% of their initial capital.
Note: It provided crucial capital to 8,500 microenterprises and supported over 43,000 women entrepreneurs.
Phase 2:
- The second phase of the fund (PLF-II) launched in March 2023, with a target fund size of Rs.400 crore.
- It is expected to announce a final close by December 2023.
- PLF-II aims to make 20–25 investments in (MFIs) /NBFCs and Fintechs rated in below BBB or lower category.
- This will enable the fund to extend financial support to an estimated 4,000 microenterprises and empower 40,000 women entrepreneurs.
Note: Presently, the initiative benefits lower-rated MIFs/NBFCs and Fintechs and provides them opportunities to tap debt funds under Alternative Investment Fund (AIF) route.
About Small Industries Development Bank of India (SIDBI):
SIDBI set up on 2nd April 1990 under an Act of the Indian Parliament.It is under the jurisdiction of the Ministry of Finance, GoI.It is the Principal Financial Institution for the Promotion, Financing, and Development of the Micro, Small, and Medium Enterprise (MSME)
CMD– Sivasubramanian Ramann
Headquarters– Lucknow, Uttar Pradesh
