Photo: iStock (iStock)
Photo: iStock (iStock)

SVL launches funds focused on SMEs, affordable housing

The housing fund will initially focus on the country’s top eight cities, which are among India’s most active real estate markets, SVL said.

SBICAP Ventures Ltd (SVL) Monday announced the launch of two funds that will focus on affordable housing and small and medium enterprises (SMEs). SVL, the alternative asset management arm of State Bank of India’s subsidiary SBI Capital Markets Ltd, plans to raise 400 crore for the SME fund and 350 crore for the affordable housing fund.

“With these two new funds, we are looking forward to strengthening our foothold in the economically and socially relevant sectors," said Varsha Purandare, managing director and chief executive at SBI Capital Markets. The two funds will help address the equity gap in the SME sector and improve the availability of affordable housing in India, she added.

The housing fund will initially focus on the country’s top eight cities, which are among India’s most active real estate markets, SVL said in a statement.

“In the housing industry, SBI is already the largest provider of home loans from the banking sector. Further, it has provided significant loan funding for construction of housing projects," the statement said.

The SME sector is expected to grow rapidly over the next few years, and, as per International Finance Corp., is estimated to account for over 40% of India’s GDP by 2020, the statement added. “Bridging the equity gap in the SME sector is therefore crucial for the overall economic development of the country and hence SVL’s launch of the SME Fund," it said.

The two new funds follow SBI’s Neev Fund, launched in 2015 to cater exclusively to small infrastructure projects in low income states, in sectors like water and sanitation, clean energy, and urban infrastructure. The Neev Fund has raised capital commitments from SBI and the Department of International Development of the UK.

The Neev Fund has invested in companies such as Milk Mantra Dairy Pvt. Ltd, an Odisha-based manufacturer and marketer of milk and milk-based products; cold chain logistics solutions provider Crystal Logistic Ltd and wind energy producer United Sustainable Energy India Pvt. Ltd.

Apart from the funds being managed by SBICAP Ventures, the lender has co-sponsored another private equity fund—Oman India Joint Investment Fund Management Co Ltd (OIJIF), a mid-market private equity firm — with the State General Reserve Fund of Oman. The fund announced a $220 million first close of its second PE fund earlier this year.

OIJIF, set up in 2010, invested around $100 million from its first fund.

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