Union Finance Minister Nirmala Sitharaman is set to launch a Rs 250 crore worth alternate investment fund (AIF) on August 21, 2021 for small and mid-sized export-oriented companies.

The Alternate Investment Fund has been named “Ubharte Sitaare”. It will be jointly sponsored by the Exim Bank of India and SIDBI. While the fund size is Rs 250 crore, it will have a greenshoe option of Rs 250 crore.

Exim Bank of India and SIDBI will invest in the fund by way of equity and equity-like products in export-oriented units, in both manufacturing and services sectors.

What is the green-shoe option?

A greenshoe option is an over-allotment option, which is a term that is commonly used to describe a special arrangement in a share offering for example an initial public offering (IPO) that will enable the investment bank to support the share price after the offering without putting their own capital at risk. 

Alternate Investment Fund: Key Details 

•The Alternate Investment Fund will be launched in Lucknow, Uttar Pradesh.

•The fund will identify Indian enterprises with potential advantages that are currently underperforming or unable to tap their latent potential to grow.

•Alternate Investment Fund will offer a mix of both financial and advisory services and structured support through investments in equity or equity-like instruments, debt (funded and non-funded) and technical assistance (advisory services, grants and soft loans) to the Indian companies.

•A press release from Exim Bank’s Ubharte Sitaare Programme (USP) identified Indian companies that have the potential to be future champions in the domestic arena while meeting global demands.

•Exim Bank and SIDBI have together already developed a robust pipeline of over 100 potential proposals across a range of sectors, such as pharma, auto components, engineering solutions, agriculture and software.

Background 

Nirmala Sitharaman in her budget speech last year had mentioned that MSMEs are vital to keeping the wheels of the economy moving, as they create jobs, innovate and are risk-takers.

The finance minister will also release the India Exim Bank’s study on ‘Exports from Uttar Pradesh: Trends, Opportunities and Policy Perspective’.

The study highlights the importance of boosting sports in economic growth and analyses the global and Indian sports goods industry, identify the export potential of the segment and discuss the challenges faced by exporters. 

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