NSIC Venture Capital Fund Limited (NVCFL) is a wholly owned subsidiary of The National Small Industries Corporation, a Mini-Ratna Corporation of the Government of India under the Ministry of Micro, Small and Medium Enterprises. The Ministry has decided to create a Fund of Funds, christened as Self Reliant India (SRI) Fund, as an Alternative Investment Fund (AIF), for providing growth capital to the Micro, Small and Medium Enterprises (MSMEs), through equity/quasi-equity/equity like structured instruments. This will facilitate them to move towards listing on the Stock Exchanges, and in becoming National and International Champions by growing beyond the bracket of MSME. 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 a corpus of INR 10,000 crore as Mother Fund; Government of India being the anchor investor. The Mother Fund would be category II Alternative Investment Fund (AIF) registered with SEBI.
An Advisory Board constituted by the Government of India, will overarch the entire executive framework of the Fund of Funds scheme. The Advisory Board would formulate broad guidelines for lending/investment including that for return on investment and tenure, exit options, sectoral focus, segmental focus and empanelment of Daughter Funds, and shall also monitor the progress of the scheme, periodically.
NVCFL will have a professional and independent Investment Committee, which shall process all the investment proposals in line with the mandate given by the NVCFL Board, and place the same before the NVCFL Board, for approval.
The target group of FoF funding, through the Daughter Funds would be MSMEs (as defined under the MSMED Act), who have a marked potential to grow, but are unable to do so because their requirement for growth capital remains unfulfilled. Non Profit institutions, NBFCs, financial inclusion sector, micro credit sector, SHGs and other financial intermediaries shall, however, not be eligible for consideration.
The Mother Fund will be unfettered and will invest in downstream Daughter Funds, which may be Category I/II AIFs, registered with SEBI, who, in turn, will be investing in MSME units. The Mother Fund will have Daughter Funds empanelled with it. The empanelled Daughter Funds will have to raise funds from outside sources and for each 4 units of funds so mobilised, they will be eligible to solicit 1 unit of fund from the Mother Fund, on back-ended basis.
With a view to broad base the reach of the FoF to the MSMEs across the country, NVCFL will endeavour to create and cultivate new set of institutions and entities which can help in setting up an MSME ecosystem by contributing to the Daughter Funds. PSUs, Financial Institutions, Industrial Development institutions can also participate in developing the MSME investing ecosystem by being Mentors and Investors.
Fund Life: SRI Fund will have a life of 15 years and it will be a revolving fund.
Detailed guidelines of the SRI Fund are available under the heading schemes. Click here