Himalaya Wealth Managers launches Rs 500 crore SME-focused AIF to bridge equity
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Himalaya Wealth Managers LLP has launched Himalaya SME Scheme-I, a Rs 500 crore AIF, to address the equity risk capital gap for high-potential Indian SMEs. The fund will invest in growth-stage companies, offering capital alongside strategic guidance to foster institutional governance and sustainable growth. This initiative aims to support SMEs in sectors benefiting from India's structural growth drivers.
As India's small and medium enterprise (SME) ecosystem enters a new phase of formalisation and expansion, Himalaya Wealth Managers LLP has launched a dedicated alternative investment fund (AIF) aimed at providing growth capital to high-potential businesses that often struggle to access institutional equity financing.The firm announced the launch of Himalaya SME Scheme-I, a SEBI-registered Category I Alternative Investment Fund, with a target corpus of Rs 250 crore and an additional Rs 250 crore greenshoe option, taking the total fund size to Rs 500 crore.
The fund seeks to address what the firm describes as the "equity risk capital gap" in India's SME sector by investing in growth-stage companies with proven business models and strong scalability potential. Himalaya Wealth Managers is targeting a gross internal rate of return (IRR) of more than 20% through a combination of disciplined investing, structured transactions and active value creation.
Unlike traditional financing solutions, the fund plans to offer a broader partnership approach by providing capital alongside governance support, strategic guidance and operational expertise to portfolio companies. The objective is to help SMEs evolve into institutionally governed businesses capable of achieving sustainable long-term growth.
The investment strategy will focus on sectors that are expected to benefit from India's structural growth drivers, including aerospace and defence, industrial automation, healthcare and life sciences, agri-tech and food processing, electronics, semiconductors, renewable energy and electric vehicles.
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The fund is backed by a leadership team comprising market veterans Deena Mehta, Manohar Lal Vij, Asit C Mehta and Jatin Tehri, who collectively bring more than 135 years of experience across equity and debt capital markets, SME financing, mergers and acquisitions, corporate advisory, due diligence and forensic analysis.
Commenting on the launch, Deena Mehta, General Partner and Investment Director at Himalaya Wealth Managers, said that while Indian SMEs are witnessing rapid formalisation and scaling opportunities, a significant shortage of equity risk capital continues to restrict the growth ambitions of many promising enterprises.
She noted that the fund will focus on niche market leaders with strong cash-flow visibility, high customer stickiness and sustainable competitive advantages.
According to Mehta, the firm's institutional expertise and rigorous investment process will serve as key differentiators as it seeks to partner with high-quality businesses and support their transition into professionally managed, high-growth enterprises.
The launch comes at a time when India's SME sector is increasingly attracting investor attention, driven by strong domestic demand, government incentives and the growing depth of the country's entrepreneurial ecosystem. Industry participants believe that dedicated SME-focused private capital pools could play a critical role in helping emerging businesses scale operations, improve governance standards and access long-term growth capital beyond traditional debt financing.
With the new fund, Himalaya Wealth Managers is looking to position itself at the intersection of India's SME growth story and the rising demand among investors for alternative assets that can generate attractive risk-adjusted returns while supporting the country's next generation of business leaders.
(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times.)
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Figures reflect the source report and its stated period. This article is for information and is not investment advice.
