Finance Minister launches the Ubharte Sitaare Fund, claiming that MSMEs are the economy’s backbone

admin November 5, 2021
Updated 2021/11/05 at 3:13 PM

The Ministry of Finance has created the ‘Ubharte Sitaare’ Alternative Investment Fund to help export-oriented MSMEs access loan and equity financing (Micro Small and medium Enterprises). An selected firm is supported under the plan, even if it is currently underperforming or unable to realise its latent potential for growth. The programme identifies such issues and offers assistance in the form of a structured support package that includes equity, financing, and technical assistance. It will also have a Rs 250 crore Greenshoe Option. An over-allotment option, also known as a greenshoe option, is a phrase that is often used to describe a unique arrangement in a share offering, such as an IPO. Exim Bank and SIDBI (Small Industries Development Bank of India) have collaborated to establish the fund, which would invest in export-oriented businesses in both the manufacturing and service sectors through equity and equity-like instruments.

Companies will be chosen for assistance based on their unique value offer in terms of technology, goods, or processes that meet global needs. Companies having a fundamentally sound financial position and an annual revenue of up to Rs 500 crore. Businesses that have a sound business strategy, excellent managerial skills, and a strong focus on product quality.

To improve India’s competitiveness in a few key industries by providing financial assistance and comprehensive mentoring. Identify and develop firms with unique technology, goods, or processes, and help them expand their export market; Assist units with export potential that are unable to expand their activities due to a lack of funds. Identify and reduce the obstacles that successful firms encounter when it comes to exporting. Through a systematic and organised export market development programme, assist existing exporters in expanding their product portfolio and targeting new markets.

Alternative investments include anything that is not a traditional form of investment. The Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012 define AIFs in India. It refers to any privately pooled investment fund (whether from domestic or international sources) that is not currently covered by any SEBI governing fund management or subject to direct regulation by any other sectoral regulator in India. Venture capital funds, hedge funds, private equity funds, commodities funds, infrastructure funds, and other types of funds are included.


Source: The Hindu

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