Self Reliant India (SRI) Fund

What is the Self Reliant India (SRI) Fund?

The Self Reliant India (SRI) Fund is a fund of funds created by the Ministry of Micro, Small and Medium Enterprises to put equity into MSMEs, announced as part of the Atmanirbhar Bharat package. According to the operating guidelines issued by the Ministry in August 2021, the SRI Fund exists because Indian MSMEs have almost no access to external equity, the legal form of most MSMEs blocks outside shareholding, ticket sizes are too small to interest venture capital, and the few VCs that do invest concentrate on technology rather than traditional manufacturing and services.

The SRI Fund does not lend and does not subsidise. It is registered as a Category II Alternative Investment Fund with SEBI and supplies capital to other SEBI-registered funds, which in turn buy stakes in MSMEs.

Key objectives

• Increase equity and equity-like financing for MSMEs and encourage them to list on stock exchanges.
• Support MSMEs that have the potential to graduate beyond the MSME bracket and become national or international champions.
• Direct capital towards traditional manufacturing and service MSMEs that existing VC and PE funds overlook.
• Encourage corporatisation, so MSMEs can accept outside shareholders at all.

Main features

• Total design size of Rs 50,000 crore; Rs 10,000 crore from the Government of India and Rs 40,000 crore mobilised by private funds.
• Two-tier Mother Fund and daughter fund structure. The Mother Fund is anchored by NSIC Venture Capital Fund Limited (NVCFL).
• Fund life of 15 years, with a commitment period of up to six years from the date of last closing.
• The Mother Fund is revolving: earnings from investments are reinvested.

How the SRI Fund actually reaches an MSME

The Government of India is the sole anchor investor in the Mother Fund and no other outside money is accepted there. Daughter funds; Category I or II AIFs registered with SEBI: apply to NVCFL for empanelment. Once empanelled, a daughter fund raises money from banks, financial institutions, HNIs, VC and PE funds, PSUs, pension funds and foreign developmental institutions. For every four units it mobilises, it can draw one unit back-ended from the Mother Fund. So 80 per cent of a daughter fund's corpus is private and 20 per cent is government.

The guidelines set hard limits at this layer:

Money released to a daughter fund and not deployed within the permitted window must be refunded to the Mother Fund, and the Mother Fund may charge interest on funds retained beyond that.

Who is eligible for the SRI Fund?

An enterprise can be considered if:

• It is an MSME as defined under the MSMED Act, 2006, as amended.
• It is an existing enterprise that is assessed as viable, with a positive growth trajectory and a defined business plan showing positive fund flow. The guidelines state that the previous three years' CAGR will be considered.
• It can accept external equity — in practice this means a corporate structure capable of issuing shares.

The following cannot apply and are not eligible for consideration:

• Non-profit institutions.
• NBFCs, the financial inclusion sector, the micro credit sector, self-help groups and other financial intermediaries.
• Enterprises outside the MSMED Act definition of a micro, small or medium enterprise.
• Individuals. The SRI Fund is not a personal benefit scheme. A citizen cannot apply for a grant, loan or subsidy under it, and no application form for individuals exists on any government portal.

Start-ups looking for early-stage government-backed equity should look instead at the Startup India Seed Fund Scheme and the Fund of Funds for Startups, which are DPIIT schemes with their own recognition requirement. MSMEs looking for debt should look at CGTMSE-backed credit or PMEGP; those are credit and subsidy schemes, and are not substitutes for equity.

How to apply for SRI Fund investment

There is no citizen-facing or MSME-facing government application. The two real routes are set out below.

Route 1, an MSME seeking growth capital

1. Complete Udyam Registration and keep the certificate current, since the MSMED Act definition is the statutory eligibility test.
2. Check the list of empanelled daughter funds published on the MSME dashboard at dashboard.msme.gov.in and on the SRI Fund pages of dcmsme.gov.in, and shortlist funds whose stated sector and stage focus match your business.
3. Prepare three years of audited financial statements, a business plan with projected fund flow, and your shareholding pattern. The guidelines make the three-year CAGR and the growth plan explicit assessment criteria.
4. Approach the daughter fund directly with that material. The daughter fund, not the Ministry of MSME and not NVCFL, decides whether to invest.
5. Go through the fund's due diligence and term sheet negotiation. Documents for an individual MSME investment are executed by the daughter fund, though they must expressly record the Mother Fund's interests and rights.

Route 2, a fund seeking empanelment as a daughter fund

1. Register the fund with SEBI as a Category I or II AIF.
2. Confirm that the fund manager or AMC has at least five years of growth funding experience and has managed a fund of at least Rs 500 crore.
3. Submit the investment policy, target MSME profile, tenure, return expectations, hurdle and ceiling rates and exit policy to the Investment Manager of the Mother Fund.
4. Undergo due diligence, after which the Investment Committee of the Mother Fund approves empanelment and fixes the exposure limit on the Investment Manager's recommendation.
5. Achieve first close within 18 months of the Mother Fund's commitment, failing which the commitment is re-evaluated.

How much does the SRI Fund provide?

The SRI Fund sets no published per-MSME ceiling. The size of any single investment is decided by the daughter fund within the investment policy approved at empanelment, and individual MSME and group exposure limits are prescribed in the Private Placement Memorandum filed with SEBI rather than in the public guidelines.

The guidelines do explain the intended multiplier. Rs 10,000 crore of government money supports Rs 50,000 crore of fund corpus; daughter funds are expected to invest five times the capital contribution received from the SRI Fund into MSMEs; and because financial institutions typically lend against a 3:1 debt-to-equity ratio, equity received should unlock roughly three times that amount again in debt.

What the SRI Fund costs

A management fee of up to 1 per cent is permitted to the SPV on the corpus actually placed at the disposal of the Mother Fund. The AMC operating the Mother Fund is paid an all-inclusive fee of up to 0.50 per cent per annum of commitments made to daughter funds, paid half-yearly. Both are debited to the fund as operational expenses, not charged to MSMEs.

Where to check SRI Fund progress

The Ministry of MSME publishes live SRI Fund numbers on dashboard.msme.gov.in. According to the Ministry's Year End Review 2025, 69 daughter funds had been empanelled with NVCFL between the fund's inception in October 2021 and 30 November 2025, and 682 MSMEs had been assisted. Nine daughter funds were empanelled during calendar 2025 alone.

Help and grievance redressal

• Ministry of MSME CHAMPIONS helpline: 1800-180-6763
• Scheme guidelines and daughter fund lists: dcmsme.gov.in, SRI Fund pages
• Live scheme data: dashboard.msme.gov.in

No agent can secure an SRI Fund investment for you. Any person offering to "sanction" SRI Fund money for a fee is describing something that does not exist. The decision to invest sits with a SEBI-registered private fund manager after commercial due diligence.