Ahmedabad, February 2015
Ahmedabad-based GVFL Limited has launched a Rs. 600-crore MSME Fund, namely Value Multiplier Fund, eyeing investments in start-ups and MSMEs in the early growth stage.
“The fund will focus on the technology start-ups and non-technology MSMEs in the early-growth stage. We have received interest from international and domestic investors,” said Mihir Joshi, President & CEO, GVFL. International investors from Singapore, US, Canada, Japan & UK and local domestic financial institutions including banks have shown interest to invest. The size of the fund may be increased if required post the Union Budget.
With an estimated internal rate of return of around 25 per cent and an investment horizon of 7-9 years, the fund would become operational over the next 4-5 months, informed Joshi.
GVFL eyes young companies with scalable business models, large target market, high entry barrier or first mover advantage, and supported by sound management teams for the Fund.
The Value Multiplier Fund has received approval from SEBI as Category I (SME Fund) under AIF Regulations.
“Investment appetite of domestic investors is also growing. There has been tremendous optimism in investment activities in India. If the country’s GDP grows at 8-9 per cent, then MSMEs are likely to grow at 18 to 20 per cent while technology-led business will grow multi-fold,” said Joshi.
Limitations of MSMEs
Due to smaller scale and limited access to funding, MSMEs and start-ups have been facing problems related to finance as they do not have collateral, track record, and creditworthiness.
“The government’s initiatives for reforms on ease of doing business, higher infrastructure spending in the next 5 to 10 years, technology penetration, and growth in the aspiring middle class will increase discretionary spending multi-fold,” said Joshi.
