SME Digital World

Author: SDW Editorial Desk

Holani Group Secures ₹184 Crore for New SME-Focused Fund

Holani Group Secures ₹184 Crore for New SME-Focused Fund

The Holani Group has entered the fund management and investment sector following the Securities and Exchange Board of India (SEBI) approval for its Alternate Investment Fund earlier this year. Jaipur-based merchant banker and stockbroker Holani Consultants has raised ₹184 crore for its new SME-focused ₹300 crore fund, launched in late April.
The fund includes a greenshoe option to retain an additional ₹100 crore.
“With our sector-agnostic strategy, we aim to create long-term value for our clients while fostering innovation, entrepreneurship, and economic growth in India through our fund,” said Ashok Holani, Director of Holani Consultants Private Limited.
The venture capital fund, Holani Venture Capital Fund Category I AIF (Alternate Investment Fund), is an Indian growth capital private equity fund managed and sponsored by Holani Capital Advisors. The fund is now registered under SEBI as a Category I AIF – Venture Capital Fund.
The fund offers investment opportunities to individuals, including high net worth individuals, corporates, institutional investors, financial institutions, family offices, insurance companies, foreign investors, other alternative investment funds, and other permissible investors.

June 5, 2024
Trent plans global retail push after acing it in India

Trent plans global retail push after acing it in India

Noel Tata-led Trent is venturing into international markets with a flagship store in Dubai, targeting the Indian diaspora. Zudio, a key brand, has surpassed ₹7,000 crore in revenue in India. The company experienced another year of substantial growth in FY24, with net sales increasing by 50% to ₹12,375 crore and net profit nearly quadrupling to ₹1,477 crore.
Riding the wave of its success in the domestic retail market, Noel Tata-led Trent is exploring opportunities to set up its retail formats outside Indian shores, beginning with a flagship store in Dubai, said people in the know. This move comes as Zudio, one of its flagship brands, surpasses the ₹7,000-crore revenue mark in India.
Trent had earlier deferred its global ambitions to consolidate domestic operations. Now, with a robust and profitable business model in place, the traditionally conservative retailer is now seeking to tap the substantial Indian diaspora overseas, becoming the first retailer to do so, the people said. It may consider an international ally for possible partnerships, though that is unconfirmed. Chief executive officer P Venkatesalu said the company, as previously, continues to explore possibilities .
According to industry watchers, Trent has cracked a sustainable and profitable business model and has now gained the confidence to scale up abroad.
Trent’s consolidated revenue has increased at a five-year compound annual growth rate of 45%, reaffirming its growth strategy driven by agile on-ground execution. Amid an apparel slowdown, Trent stands out as an anomaly, consistently delivering positive surprises in both revenue and profit margin.
The company reported another strong growth year in FY24, with net sales surging 50% to ₹12,375 crore and net profit rising nearly fourfold to ₹1,477 crore. This robust performance was driven by a combination of strong like-for-like growth, aggressive expansion of Zudio stores and significant traction in emerging categories such as beauty and personal care, innerwear, and footwear.
In the March 2024 quarter, its fashion apparel brand Westside unit added 12 stores, bringing the total store count to 232, while value fashion concept Zudio opened 86 new stores, taking its total count to 545.

Shares of Trent gained 192% in the last one year and 305% over two years, compared with gains of 10% and 18% in the Sensex during the same periods.
Trent was the top performer among all the Tata Group stocks during these periods.
The only retailer pursuing an unconventional ‘own brands’ strategy, Trent had accelerated the expansion of its key formats – Westside, Zudio and Star Bazaar.

Westside and Zudio are like two siblings playing in the fashion space. They vary on product, design, fabric, etc., but are still relevant at different price points. Moreover, the learnings from Westside helped build a strong Zudio model and the backend integration of the two brands is helping both businesses deliver synergistic growth,” Venkatesalu told ET.
Trent’s brands are not sold on any other ecommerce websites except Tata platforms (Tata Neu and TataCliq). The Zudio format today contributes as much as 30% to total revenue compared with only 8% a few years back.

The retailer is applying the same strategy at the Star Bazaar business in the food and grocery space and is witnessing some very strong customer traction.
It has consistently delivered robust financial results, boasting 31% and 26% compound annual growth rates (CAGR) in revenue and profit, respectively, over the past five years. Trent is now seen by its management team as a platform that allows to originate, incubate and scale a portfolio of growth engines.

June 3, 2024
Exploring the Impact of India’s Evolving GCC Landscape on Fintech Innovation for SME Sector Growth

Exploring the Impact of India’s Evolving GCC Landscape on Fintech Innovation for SME Sector Growth

Through inventive strategies and cooperative endeavors, Global Capability Centers (GCCs) are playing a pivotal role in developing pioneering products and services aimed at fostering financial inclusivity.
Initially established to capitalize on India’s cost-effectiveness, GCCs have evolved into crucial hubs for driving innovation and development across various sectors. Leveraging India’s technological prowess and skilled workforce, these centers offer a spectrum of services, including tech research, finance, audit, and operational support for their parent organizations worldwide.
The SME sector has long grappled with limited access to credit. Fintech innovation, powered by advanced technologies like artificial intelligence (AI), machine learning (ML), blockchain, and big data analytics, holds the key to addressing this challenge. With access to a diverse talent pool comprising engineers, data scientists, and banking experts, GCCs are well-positioned to lead innovation in areas such as digital payments, lending, risk management, and customer engagement. This influx of talent not only benefits multinational corporations but also enriches the broader finance ecosystem on a global scale.
For instance, JP Morgan’s Bengaluru global service center is expanding its scope to develop digital transformation solutions for its global operations. The team in India has created Story, a platform facilitating commercial real estate management, rent processing, market analysis, and tenant screening for smaller multifamily owner-operator businesses.
GCC-driven advancements enable the swift delivery of customer-centric personalized solutions, streamline banking platforms, and transform payment and lending solutions. These digital innovations are particularly beneficial for small businesses, which often require timely access to capital to seize growth opportunities or address cash flow challenges.
Moreover, GCCs foster knowledge sharing and collaboration among diverse business units. NatWest’s India centers, for example, collaborate closely with UK teams on core engineering projects, driving digital transformation and enhancing accessibility to banking services for customers.
Additionally, GCCs and fintech companies in the BFSI sector collaborate in areas such as digital lending, payments, and risk monitoring to adapt to the evolving financial landscape. GCCs prioritize upskilling their talent in emerging tech areas to stay abreast of evolving technologies.
In conclusion, India’s GCCs are driving digital transformation and fostering financial inclusion through innovative strategies and collaborative efforts, shaping the fintech landscape to better serve the needs of SMEs and other stakeholders.

June 3, 2024
Pharma and Electronics Manufacturing to Receive Boost in Modi 3.0

Pharma and Electronics Manufacturing to Receive Boost in Modi 3.0 Era

With the BJP anticipated to secure a significant portion of seats in UP, Gujarat, Maharashtra, Telangana, and Himachal Pradesh, industry leaders foresee a continued emphasis on local manufacturing. These states serve as major manufacturing hubs for Active Pharmaceutical Ingredients (APIs) and electronic goods.
As the exit poll results indicate a clear victory for Prime Minister Narendra Modi-led BJP government at the center, stakeholders from sectors like pharmaceuticals, medical devices, and electronics manufacturing anticipate a substantial push for local production.
According to the India Today-Axis My India exit poll, the BJP is expected to sweep all seats in Gujarat and Himachal Pradesh, as well as over 60 percent and 70 percent of Lok Sabha seats in Maharashtra and Telangana, respectively. These states play a pivotal role as manufacturing hubs for pharmaceuticals and medical devices. Additionally, the BJP is predicted to secure over 85 percent of seats in Uttar Pradesh and Andhra Pradesh, two states along with Telangana that are crucial for electronics manufacturing in the country.
Boost for Pharma:
A robust performance is anticipated by the BJP-led National Democratic Alliance (NDA) in key states, driven by a manifesto emphasizing the manufacturing of Active Pharmaceutical Ingredients (APIs) and advancing research. Raj Prakash Vyas, President-Corporate Affairs at Cadila Pharmaceuticals, highlighted potential benefits such as the expansion of PLI schemes to encourage domestic manufacturing and stringent quality control measures to combat spurious drugs.
Vyas proposed the establishment of an Innovation Task Force (ITF) dedicated to pharmaceuticals, comprising experts from various fields, to accelerate the development and adoption of innovative solutions. Yogesh Mudras, Managing Director at Informa Markets, noted India’s leadership in the pharmaceutical industry and stressed the need for further investments in research and rural healthcare.
Tuhin A Sinha, National Spokesperson for BJP, remarked that the exit polls support the PM’s vision of Viksit Bharat (developed India) and are positive for the pharmaceutical and healthcare sectors, where India has emerged as a global leader.
India as an Electronics Hub:
With the BJP government at the center and gaining influence in major manufacturing hubs like UP, AP, and Telangana, the industry expects further impetus to transform India into a major hub for electronic exports. The government’s PLI scheme has attracted leading players to set up new plants, increasing capacity in areas like mobile handsets, LEDs, and components for air conditioners.
Avneet Singh Marwah, CEO of Superplastronics, emphasized the importance of policy continuity and infrastructure development to support the industry. He also called for a reduction in GST rates on household items like TVs and ACs to stimulate demand.
Rajiv Nath, forum coordinator of the Association of Indian Medical Device Industry (AiMeD), anticipates government support to enhance medical device manufacturing, advocating for a predictable tariff regime and fair pricing practices.

June 3, 2024
Why Sustainability Reporting Matters for SMEs

Small Business, Big Impact: Why Sustainability Reporting Matters for SMEs

A new guide from ACCA (the Association of Chartered Certified Accountants) recognizes the vital role Small and Medium-sized Enterprises (SMEs) play in global supply chains. Their guide, titled “Sustainability Reporting – SME Guide,” empowers SMEs to create the sustainability reports increasingly demanded by regulators and stakeholders.
Sundeep Jakhar, head of public affairs for ACCA in India, emphasizes the importance of sustainability practices for Indian SMEs, which make up a significant portion of the Indian business landscape. He acknowledges their unique challenges, such as limited resources, but highlights the numerous benefits sustainability reporting can unlock, including access to new markets and better financing opportunities. This translates to improved competitiveness on a global scale for Indian SMEs, helping them align with international standards.
Report co-author Sharon Machado, head of sustainable business at ACCA, explains that creating and using sustainability information empowers SMEs, their advisors, and stakeholders to identify opportunities, manage risks, and ultimately strengthen their financial position. This translates to easier investment attraction, preferential terms with suppliers, and a competitive edge in the talent pool.
As the demand for sustainability information rises, all organizations, including SMEs (which comprise 90% of all organizations globally), need to be prepared to provide information on their approach to managing sustainability risks and opportunities. This information is crucial for regulators, investors, and other stakeholders throughout the value chain.
The ACCA guide highlights the competitive advantage SMEs can gain by communicating and using sustainability information. Report co-author Aaron Saw, head of corporate reporting insights at ACCA, acknowledges the challenges SMEs might face, especially financially. However, he emphasizes that evidence shows the effort is worthwhile. The ACCA encourages all SMEs to take small but crucial first steps towards creating sustainability reports, paving the way for a stronger and more competitive business.

You can read here to learn more: https://smefutures.com/sustainability-related-information-enables-better-business-for-smes-says-new-guide-from-acca/

May 30, 2024
Recordent Announces 100+ Meets to Connect 10,000 Indian SMEs Nationwide

Recordent Announces 100+ Meets to Connect 10,000 Indian SMEs Nationwide

HYDERABAD: Fintech firm Recordent announced on Thursday its plan to host over 100 Knowledge Meets, engaging with more than 10,000 SMEs across India. These events aim to analyze and streamline payment collection practices for the SME sector, addressing challenges in cash flow management and credit awareness. The initiative will kick off with inaugural events in Mumbai, Hyderabad, and Delhi.
Recordent highlighted that over 90% of SMEs face significant payment delays, affecting business operations and continuity. By collaborating with industry associations, startups, enterprise unions, and SME executives, Recordent seeks to tackle collection issues within the industry. Discussions will focus on adopting new industry practices to improve accounts receivable collections and manage credit exposure and risk using payment data.
These events will also serve as valuable networking platforms, allowing participants to gain insights and build connections within the industry.
Winny Patro, CEO of Recordent, stated, “Over 90% of Indian SMEs face cash flow challenges due to extending credit to buyers, hindering growth and increasing failure rates. Our SME outreach strategically addresses this challenge head-on. By providing a comprehensive suite of solutions, from checking buyers’ credit history to managing defaults, we are committed to empowering SMEs to navigate cash flow challenges and seize growth opportunities.”
Recordent offers a comprehensive suite of accounts receivable collections and credit risk management solutions. This includes payment reminder automation, invoice management, CIBIL-like credit registry reporting of defaults, cautionary and legal notices for recovery, collections analytics for informed decision-making, and credit bureau reports for credit assessment.

May 30, 2024
Display Manufacturing Needs Special Focus, Says ICEA

Display Manufacturing Needs Special Focus, Says ICEA

The government is providing 50% fiscal support under the Rs 76,000-crore semiconductor incentive scheme for display fabrication.
The India Cellular and Electronics Association (ICEA) emphasized on Tuesday the need for special attention to display manufacturing in India, which is currently the third-largest consumer of display products globally.
Despite the government offering 50% fiscal support under the Rs 76,000-crore semiconductor incentive scheme for setting up display fabrication units, none of the three applications received for display fabs have been approved so far.
“We have not made significant progress beyond display assembly. Displays constitute a major 15% to 20% of the Bill of Material, comparable to logic, memory, and semiconductors. This is a significant concern,” said Pankaj Mohindroo, chairman of ICEA.
The association, which includes companies like Apple, Foxconn, Lava, and other Chinese handset and electronics companies, stresses the importance of focusing on this sector to establish India as a robust display manufacturing hub.
Mohindroo added, “This sector needs special attention, and we are determined to make India a strong display manufacturing nation.”
Experts believe that display manufacturing in India offers a unique opportunity to attract international companies looking to diversify their supply chains. This would not only meet domestic demand but also enhance exports from India.
According to ICEA, the demand for displays in India is primarily driven by mobile phones, among other devices such as televisions, notebooks, tablets, and desktops.
The total demand for displays in the country increased to 338.4 million units in 2023, up from 303.7 million units in 2022, with mobile phones accounting for 310 million display units in 2023. The overall display demand in India is expected to reach 383.5 million units by 2026.

May 30, 2024
CRISIL SME Tracker: Higher demand, PLI to propel electronics MSMEs in FY25

CRISIL SME Tracker: Higher demand, PLI to propel electronics MSMEs in FY25

Various factors contributed to the growth, such as increasing penetration of internet and 5G services, rising consumer income, shorter replacement cycles, easier payment terms
Domestic consumption of electronics items is estimated to have grown 13-15 per cent to Rs 14-15 trillion in the financial year ended March 31, 2024 (FY24), with mobile phones and consumer and industrial electronics accounting for 50-55 per cent of the pie.
Various factors contributed to the growth, such as increasing penetration of internet and 5G services, rising consumer income, shorter replacement cycles, easier payment terms, and developments in the auto, electric vehicle, and power segments.
In FY25, overall electronics consumption growth is expected to moderate to 10-12 per cent as inflation marginally affects sales of mobile phones and consumer durables, which account for 40 per cent of electronics consumption in the country.
Electronics production, however, is expected to grow 15-20 per cent, largely owing to the production-linked incentive scheme (PLI) that is encouraging manufacturing of mobile phones, white goods, information technology hardware, and solar photovoltaic cells and modules.
That augurs well for the micro, small and medium enterprises (MSMEs) that produce electronics components and assemble consumer and industrial electronics products.
The MSME units account for 25-35 per cent of the industry’s consumption of components. These units are expected to log a revenue growth of 11-13 per cent year-on-year (Y-o-Y) in FY25, driven by mobile phones, consumer and industrial electronics, computer hardware, and strategic electronics.
As for margins, following a range-bound performance in FY24, the MSMEs are expected to experience a slight contraction of up to 30 basis points in FY25, primarily because of commodity prices.

May 29, 2024
Indian PE-VC Investment Declines in 2023; Manufacturing Sector Shows 20% CAGR Growth Over Two Years

Indian PE-VC Investment Declines in 2023; Manufacturing Sector Shows 20% CAGR Growth Over Two Years, Says Report

The manufacturing sector in India has emerged as a strong investment opportunity, with around $2 billion in investments growing at a 20 percent CAGR over the last two years (2021–23).
Indian private equity and venture capital (PE-VC) investments softened to approximately $39 billion in 2023, reflecting a global trend, according to a report by Bain & Company. Traditional sectors such as manufacturing, healthcare, and energy demonstrated resilience, accounting for about 75 percent of investments in 2023, up from 60 percent in 2022.
The growth in the manufacturing sector, driven by supply chain diversification, government incentives, and the availability of scale assets, was highlighted in Bain & Company’s annual ‘India Private Equity Report 2024’, created in collaboration with the Indian Venture and Alternate Capital Association (IVCA).
With electric vehicle (EV) penetration in India expected to reach 40 percent by 2030, original equipment manufacturers (OEMs) dominated more than 70 percent of deal value in the past year. Significant investments (over $100 million) were made in companies such as Ola Electric, Ather Energy, Mahindra EV, and TI Clean Mobility. Additionally, packaging saw substantial deals in globally competitive companies with strong export performance, including Polyplex and Tufropes, both generating over 70 percent of sales from exports.
Gustaf Ericson, Associate Partner at Bain & Company, stated, “Advanced manufacturing is expected to see increased deal activity in the near to mid-term, driven by China+1 tailwinds, government incentives like PLI, and the emergence of scaled assets across multiple segments. We expect electronic manufacturing services, packaging, and EV players to benefit significantly from this favorable environment in the coming years.”
Despite a temperate outlook for India PE-VC dealmaking in 2024 due to global macroeconomic stabilization, traditional sectors such as advanced manufacturing are poised to attract substantial investments. This is attributed to positive fundamentals, supportive policies (like production-linked incentives and tax incentives), and the growth of scale assets across various sub-segments.
The EV market is anticipated to experience robust deal activity, especially in OEMs with scale assets planning capacity expansions or new product launches, as well as in charging infrastructure and battery-swapping players looking to expand geographically or into new EV segments.
Key investment drivers are expected in plastics, secondary paper, and glass, propelled by the F&B industry’s demand for premium, lightweight, cost-effective plastics, and the e-commerce sector’s shift towards sustainable packaging. Revenues for India-based packaging companies are projected to grow at around 10 percent CAGR between 2023-27.
Electronics production in India is forecasted to grow at a 25 percent CAGR over 2023-27, with mobile phones, IT hardware, and consumer electronics being the most attractive sub-segments for deal activity. This growth is driven by increased smartphone and consumer durable penetration, faster replacement cycles, significant export uptake by leading players, increased backward integration (e.g., into components), and a favorable duty structure for import substitution.
Additionally, global supply chain diversification is likely to benefit Indian manufacturers in export-oriented sectors like electronics, pharmaceuticals (especially APIs and CDMOs), and chemicals (specialty chemicals and agrochemicals), given their globally competitive scale and robust government support.
The Bain & Company report also noted that India-focused funds are increasingly diversifying across various sectors. Leading funds entered new sectors from 2021–23, with manufacturing, healthcare, new-age tech, and SaaS attracting the most new investments.
In 2023, India saw $29.6 billion in PE investments during a subdued year for private equity globally, marking an 18 percent drop from 2022’s peak value of $36 billion. PE accounted for around 75 percent of total PE-VC deal value, driven by large-scale deals for high-quality assets. VC investments dropped significantly to $9.6 billion in 2023 from $25.7 billion in 2022, as investors prioritized unit economics over growth and recalibrated strategies amid macroeconomic challenges.

May 29, 2024
IIT-Madras to Fund Sports-Tech Startups

IIT-Madras to Fund Sports-Tech Startups

IIT-Madras is set to provide up to Rs 5 crore in funding to support innovative sports-tech startups in India, aiming to bridge technology and the sporting industry to enhance athletic excellence. These startups will focus on AI and IoT-based products incorporating sensors, networks, actuators, and controllers, leading to the creation of a sports tech incubator fund at IIT Madras. The funding will be provided by the IIT-Madras Pravartak Technologies Foundation and the IIT Madras Centre of Excellence in Sports Science and Analytics (CESSA).
Identified areas for sports tech innovation include media and entertainment, fan/player engagement, athlete performance measurement and enhancement, team and coach success, esports, sports education, data analytics, and sports commerce and communities.
Shortlisted submissions will present their business plans at the ‘IIT Madras Sports Technology Start-up Conclave’ on June 14-15 at the IIT Madras Research Park, the first event of its kind in India. After evaluation by a distinguished panel and final review by IIT Madras CESSA and Pravartak Technologies, the selected startups and their funding amounts will be finalized.
Ramesh Kumar, CEO of CESSA and former global head of ESPNCricinfo, emphasized the goal of creating a deeper connection between technology and sports, aiming to foster an ecosystem for developing products that enhance sports performance. Prof Mahesh Panchagnula, Dean of Alumni and Corporate Relations at IIT Madras and head of CESSA highlighted the conclave as a significant step in India’s sports tech innovation as the country prepares to bid for the Olympics.
Funding for each startup, based on business potential, will range from Rs 10 lakh to Rs 50 lakh, with IITM Pravartak Technologies Foundation taking an equity stake and IITM CESSA providing support during the incubation process. Startups can be at the idea or initial stage but must have incorporated their company and intellectual property rights.
IITM CESSA will offer startups access to high-tech sports infrastructure, technical support, a comprehensive startup ecosystem, and a data center for research. Shankar Raman of IIT-Madras Pravartak Technologies Foundation expressed confidence in fostering entrepreneurs who use technology to enhance athletes’ performance globally.
As of May 2024, the IIT-Madras Incubation Cell has incubated 351 startups, attracting Rs 10,425 crore in investment and achieving a combined valuation of Rs 45,000 crore. These startups generated Rs 3,600 crore in revenue for the financial year 2022-23 and created over 10,000 jobs, filing more than 210 patents in the process.

May 28, 2024