SIDBI announces plans to raise Rs 5,000 crore through a rights issue in the upcoming fiscal year to support business growth, according to its chairman and managing director S Ramann. The bank, a key player in SME finance, requires additional capital to sustain its robust credit growth.
“The refinancing entity for SME finance is witnessing strong credit growth, and to further grow the business, capital would be required,” stated Ramann during the launch of a credit programme for Jan Aushadhi Kendras.
Ramann revealed that the government, SIDBI’s largest shareholder, has been approached to participate in the rights issue. The Government of India holds a 20.85% stake, while entities like State Bank of India and Life Insurance Corporation of India (LIC) own significant shares.
Regarding the loan portfolio, Ramann mentioned that SIDBI’s loan book is nearing Rs 5 lakh crore and anticipates it to reach around Rs 5.2 lakh crore by the end of the fiscal year.
Currently, SIDBI accounts for 17% of the total loans disbursed to MSMEs in India, showcasing its significant role in supporting the sector.
Ramann also highlighted the impact of the Fund of Funds for Startups (FFS), stating, “The Fund of Funds for Startups (FFS) has committed Rs 9,500 crore for the promotion of new ventures in the country.” The FFS initiative, launched in 2016, aims to support innovation-driven enterprises by facilitating funding through SEBI-registered Alternative Investment Funds (AIFs).
He further added, “The commitment of Rs 9,500 crore has led to over 100 AIFs raising Rs 56,000 crore more,” underscoring the success of the FFS initiative in mobilizing funds for startups.
