India’s ICICI Planning SME Fund

MUMBAI (Reuters) – India’s ICICI Bank (ICBK.BO) is set to launch a $150 million to $200 million fund in a few weeks that will be invested in small and medium companies, two sources briefed of the plans said on Tuesday.

The bank may start road shows for the fund raising next week and hopes to tap institutional investors and top customers, said the sources, who declined to be identified because they were not authorised to speak to the media.

“Regulatory approvals required for the fund are currently being processed and we would be able to provide an update once these have been granted and the fund raising process is completed,” an ICICI spokesman said in an emailed statement.

The small and medium companies spans sectors such as jewellery, textiles and engineering that typically lean on founders for equity and banks for debt.

These sectors usually fall below the threshold for a private equity fund, while venture capital firms focus on start-ups in software and back offices.

The new fund will not be part of ICICI’s private equity arm, ICICI Ventures, which manages more than $2 billion, the sources said.

Loans to small and medium companies contributed 4 percent of ICICI’s $46.3 billion loan book at the end of March, a presentation on its website showed. ($1=47.1 rupees)

By Narayanan Somasundaram
(Editing by Ranjit Gangadharan)