Interview With : IAS Balamurugan, Managing Partner of Anicut Capital LLP
Updated on: 15 Jun 2016
Banks only meet a part of the huge funding needs of small businesses Smaller businesses are facing a problem. They want to pursue interesting ideas and need money but banks are stricter with sanctioning loans. The window of opportunity is fast closing and many businesses are hurting for funds. This is the niche that IAS Balamurugan, Managing Partner, Anicut Capital LLP, which manages Grand Anicut Fund Trust, hopes to tap with its new alternate investment debt fund. Excerpts from an interview:
What is the rationale for the fund launch?
The fund will provide high-interest debt to SMEs in various verticals. For example, it could be used to acquire businesses or other assets through M&A; expansions that they want to move quickly on and infuse equity when valuations increase. It can also be to raise cash quickly against sale of non-core assets which may take time to dispose of.
There are also cases where founders want to give PE funds, which had invested a while back in them, an exit. They want to buy back shares and increase the promoter ownership. We also expect to invest along with PE funds (and in between two equity funding rounds also) when the business seeks capital infusion and prefers a mix of equity and debt.
The funding need in the SME sector is huge; schemes such as Mudra are addressing the smaller ticket ones. There is room for many kinds of loan products – different tenure, terms, risk profile — as the needs are varied and growing.