Exhilway To Roll Out INR 160 Crore SME Fund

SME VIVO will raise INR 160 crore and will fund close to 12 companies this year. The fund will be distributed nationwide from November this year.

New Delhi (I-Newswire) September 26, 2012 - Exhilway Private Capital Market (EPCM), the India’s first pre-IPO market for private companies will float a INR 160 crore open ended SME fund named SME VIVO. The proposed fund will raise money from the retail public as well as the sophisticated investors nationwide.

The fund will be a part of EPCM’s investment advisory series and will commence its business next month. The distribution will take place via leading brokerage houses and financial advisors nationwide as an alternative investment product.

The accredited individual investors will invest a minimum of INR 15 lakhs and corporate investors will invest a minimum of INR 50 lakhs.

The fund will carry an annual management fee of 3% and a one time distribution fee of 2.75%. The lock in period for the product is kept at 3 years.

The fund will offer capital protection to its investors in case the portfolio companies defaults, the risks like fraud and business failure is covered.

EPCM will fund the following companies this year - Minds2Mentor, PolicyHeaven.com, Stylehistreet.com, Jupiqon, Tuscana Tech, IMN News Network, SourceEdge, GlamIn Show Biz TV and few others.

“This alternative asset class offers downward risk protection which is unique in its class. The quality SME companies when funded well and can generate a return between 30-50% annually. Hence, the product has an average upside potential of 30%,” said Akash Goel, of Jalandhar based Bull Bear Securities.

EPCM helps SME’s to derive its true market capitalization before it goes public. EPCM Index since its inception in April, 2012 has generated an average return of 16.40% per company.

Some of the analysts has concerns about the corporate governance of the SME’s listed out for fund raising. “The companies who participate in such funds may hide some facts from the public like the accrued losses, correct client count and revenue per client, current debt, growth reports of the business etc. The due diligence is hence recommended,” said Akash Nehwal, a Mumbai based practising chartered accountant.