IndiaNivesh Fund a lifeline for SMEs

MUMBAI: Small and medium companies, struggling to raise funds, now have a lifeline in IndiaNivesh-First Bridge Capital Manager. The fund is introducing a first-of-itskind capital support for firms that critically need re-financing for survival.

IndiaNivesh-First Bridge Capital has closed its first tranche of the Rs 900-crore fund, called the IndiaNivesh Renaissance Fund (INRF). It will own significant minority stakes in SMEs by infusing capital. In the first instalment, the fund raised Rs 168 crore.

“We will take substantial minority stakes to infuse equity capital to boost operations and optimise capacity utilisation,” said Sridhar Ramachandran, CIO, IndiaNivesh First Bridge Fund Managers, who is managing this particular fund. “We are looking to deploy the money in SMEs that are struggling due to business underperformance or financial stress. This is India’s first turnaround fund and such companies are just a step away from turning non-performing assets.” IndiaNivesh Renaissance Fund is chaired by former Securities & Exchange Board of India chairman GN Bajpai. It will have two components – about Rs 300 crore from domestic investors and Rs 600 crore from international investors. The fund is useful for those SMEs where banks have closed credit facilities. The funding is for working capital. The fund will only invest in those SMEs with yearly revenues in the range of Rs 100-800 crore.


The tenure of such equity funding is about three-to-five years within which the investee company should generate returns for the fund. The fund aims to attain over 20 per cent (internal rate of return).

Cash has been raised from a sponsor and anchor investor, high networth individuals, family offices and Non-Resident Indians, besides contribution from the management teams.

Co-owners of the fund, IndiaNivesh and First Bridge, have contributed Rs 25 crore and Rs 5 crore each to the corpus. The first closing of our fund highlights the relevance of our unique turnaround proposition for SMEs, said KK Rathi, founder at IndiaNivesh Frist Bridge Fund Managers.