Small & medium enterprises (SME) sector is the future of India. However private equity funds - barring a few ones - have largely neglected this sector. To cash in on the funding gap in this segment, a recently formed private equity firm Forum Synergies is in the process of floating what could be the single biggest SME fund to be launched in India till date. The firm has been co-founded by Samir Inamdar, former president & CEO of GE Consumer & Industrial for India.
The PE firm, which has a registered office in Bangalore, is raising $135 million (Rs 580 crore) through a Mauritius-based offshore fund. In addition, it also plans to raise funds from domestic investors. The total quantum of funds to be raised is not clear but it is likely to be Rs 600 crore plus (over $150 million).
While SBI recently announced plans of floating a Rs 500 crore SME fund, the most prolific investor in the space SIDBI Venture Capital is also raising its third fund which is expected to have a corpus of more than Rs 500 crore. Some of the other SME focused fund houses active in India include Avigo Capital Partners, Aeurous, Blue River Capital, Lighthouse Funds and Zephyr Peacock.
VC Circle sources inform that the offshore entity– India Knowledge Manufacturing Company, a closed ended fund based in Mauritius, will raise funds from HNIs, NRIs besides corporate and financial institutions based in US, UK, the Middle East and South East Asia.
The SME fund will look to infuse growth-expansion capital besides targeting small and mid sized firms eyeing pre IPO transactions. The fund which will have a life span of 10 years will invest with a time horizon of 4-6 years.
Forum Synergies is co-founded by Samir Inamdar and Sudhir Kant. While Inamdar has a history in auto and engineering sectors, Sudhir Kant has experience in pharma, biotech and chemical engineering sectors. Besides the co-founders, the firm has also brought on board Prashant Goyal, former investment manager with $50 million VC fund Indus Venture Management, as its COO.