NSIC Venture Capital

Funds managed

Fund name	Asset class	License No.
Self Reliant India (SRI) Fund(Fund of Fund)	Venture Capital	IN/AIF2/21-22/0924

About 

NSIC Venture Capital Fund Limited (NVCFL) is a wholly owned subsidiary of The National Small Industries Corporation (NSIC), a Mini-Ratna Corporation of the Government of India under the Ministry of Micro, Small and Medium Enterprises.The Ministry has decided to establish a Fund of Funds, called Self Reliant India (SRI) Fund, as an Alternative Investment Fund (AIF), to provide growth capital to MSMEs through equity/quasi-equity/equity-like structured instruments. 

This will enable them to advance beyond the MSME bracket and into the stock exchanges, as well as to become national and international champions. The Fund of Funds is to be anchored by NSIC Venture Capital Fund Limited.

SRI Fund will have a Mother Fund / Daughter Fund structure, with the Mother Fund having a corpus of INR 10,000 crore and total Fund corpus shall be INR 50,000 crore and the Government of India as the anchor investor. 

The Mother Fund would be a SEBI-registered category II Alternative Investment Fund (AIF). Investment through Daughter Funds registered as Category I/II AIFs. 

Mother Fund will provide funds only to the Daughter Funds for onward investment as growth capital, while the investment in MSMEs will be done by the Daughter Funds

PSUs, financial institutions, and industrial development agencies can all help to grow the MSME investing ecosystem by serving as mentors and investors.

Key staff

Shri Alka Nangia Arora – Chairman

Shri Gaurang Dixit – Director

Shri Ateesh Kumar Singh – Government Nominee Director

Shri Rajib Kumar Sen – Government Nominee Director

Ms. Nishtha Goyal – Company Secretary

(There is no information about the team on the website or on LinkedIn.)

Investment philosophy

Could not find any

Investment Strategy (Mother Fund):

• The Mother Fund would be unfettered, i.e. can invest in both external AIFs or internally established AIFs/Daughter Funds, if any, that have a good investment track record and are strategic fits.
• The Mother Fund will route all its investments, through the approved, specific daughter funds only and will not directly invest in MSMEs.
• The investment focus will be on traditional manufacturing and service MSMEs as they are facing deficiency to a greater degree because the existing VCs/PEs have a bias towards I.T. and Technology based industries, which offer better control and high and faster returns.
• The Daughter Funds will be empanelled with the Mother Fund provided they fulfil the following criteria and abide by the below mentioned conditions: (There are nine conditions listed on page 6 of the following link.)

Guidelines-for-Self-Reliant-India-(SRI)-Fund.pdf (dcmsme.gov.in)

Investment Strategy (Daughter Fund):

There will be more than one daughter funds. The Investment Committee, comprising of professionals shall take investment decisions in regard to proposals received, only in line with the business objectives of the respective Daughter Fund, as approved by the Mother Fund at the time of empanelment.

Media 

FM announces Rs 50,000-cr equity infusion through ‘Fund of Funds’ for MSMEs – May 17, 2020

FM Announces Rs 50,000-cr Equity Infusion Through ‘Fund Of Funds’ For MSMEs (moneycontrol.com)

Finance Minister Nirmala Sitharaman on May 13 announced Rs 50,000-crore equity infusion through Fund of Funds for MSMEs, as she shared the details of the Rs 20-lakh-crore stimulus package Prime Minister Narendra Modi had talked about a day earlier.

Micro, small and medium enterprises are facing a severe shortage of capital. It will encourage MSMEs to get listed on the main board of stock exchanges, the government said.

Based on the recommendations of the UK Sinha Committee, the Fund of Funds was first announced in the Union Budget on February 1, 2020. An investment of Rs. 10,000 crore was proposed in the Budget for the scheme.

The scheme was approved by the finance ministry in April, pending Cabinet approval.Once operations resume, there will be issues with the sustainability of MSMEs leading to a large number of layoffs, a report by KPMG has said.

Atmanirbhar Bharat Schemes: Status check on some so far – January 06, 2021 

Atmanirbhar Bharat Schemes: Status Check On Some So Far (moneycontrol.com)

The Ministry of MSME had approved and issued the guidelines on Self-Reliant India (SRI) Fund on August 5. Following due process, SBI Cap Ventures has been selected as a fund manager or asset management committee. SBI Cap has already started working towards the preparation of Private Placement Memorandum (PPM). The Ministry of MSME is taking further steps for operationalisation of the fund.

The Rs 45,000 crore PCGS was announced as part of the Atmanirbhar Bharat Abhiyan package and was aimed at providing liquidity support to weaker NBFCs, housing finance companies (HFCs) and microfinance institutions (MFIs).

Analyst questions

What is your investment philosophy?

Why is there no detailed information about your team on your website?

Which external AIF mother fund has made an investment in?

Reference

NSIC Venture Capital Fund Limited (nvcfl.co.in)

Request for Proposal (nsic.co.in)

Guidelines-for-Self-Reliant-India-(SRI)-Fund.pdf (dcmsme.gov.in)

Prepared by Tushar Jajoo