Ubharte Sitare Fund

Ubharte Sitare Fund

Subject – Economy

Context – Finance minister Nirmala Sitharaman launched Rs 250 crore worth Alternative Investment Fund for export-oriented small and mid-sized companies.

Concept –

• UbharteSitaare fund has been set up jointly by Exim Bank and SIDBI which will invest in the fund by way of equity and equity-like products in export-oriented units, in both manufacturing and services sectors.
• The fund will also have a greenshoe option of Rs 250 crore.
  • A greenshoe or an ‘over-allotment option’ is a provision in an IPO underwriting agreement that provides the underwriter with the right to sell more shares than originally planned.
  • It enables the investment bank representing the underwriters to support the share price after the offering without putting their own capital at risk.
• Ubharte Sitaare Programme (USP) identifies Indian companies that have the potential to be future champions in the domestic arena while meeting global demands and standards.
• The aim is to identify such companies that are underperforming but have potential advantages in terms of technology, processes or products, and export potential.
• Alternate Investment Fund will offer a mix of both financial and advisory services and structured support through investments in equity or equity-like instruments.
• Also assist with debt (funded and non-funded) and technical assistance including advisory services, grants and soft loans to the Indian companies.
• The main purpose is to encourage MSMEs as they are vital to the economy in terms of creating jobs, doing innovations and taking risks.