Ubharte Sitaare Fund:
Context:The Finance Minister has announced an Alternative Investment Fund of Rs 250 crore for export-oriented micro, small, and medium firms (MSMEs). About:
Ubharte Sitaare FundUbharte sitaare funds, are a sort of alternative investment fund.
Objectives of Fund:
- To identify Indian businesses that have significant competitive advantages in terms of technology, goods, or processes, as well as export potential, but are currently underperforming or unable to realise their full potential.
- The major goal is to boost MSMEs because they are critical to the economy in terms of job creation, innovation, and revitalization.
The scheme’s main features are as follows:
- Exim Bank and SIDBI established the Fund (Small Industries Development Bank of India).
- The fund consists of a combination of structured assistance, including both financial and consulting services.
- It will also have a Rs 250 crore Greenshoe Option.
- The Fund invests in potential enterprises in a variety of industries, including pharmaceuticals, auto components, engineering solutions, agriculture, and software, among others.
The significance of this programme is as follows:
- It recognises Indian enterprises with the potential to be future domestic winners while also meeting global aspirations.
- MSME expansion will boost the broader economy because they account for around 45 percent of the country’s total manufacturing output, 40 percent of exports, and nearly 30 percent of national GDP.
- This would also help to encourage sector-specific growth in Uttar Pradesh, such as the “ONE DISTRICT ONE PRODUCT” initiative.
Alternative Investment Fund (AIF):
- Alternative Investment Funds are a type of pooled investment vehicle that invests in venture capital, private equity, hedge funds, managed futures, and other types of investments.
- In simple terms, an AIF is a type of investment that is distinct from traditional investment options such as stocks, bonds, and other debt securities.
- AIF is exempt from the SEBI (Mutual Funds) Laws of 1996 and the SEBI (Collective Investment Schemes) Laws of 1999, as well as any other Board laws governing fund management.
- Alternative investment funds, on the other hand, must register with SEBI.
- It’s a case of over-allotment. In the context of an initial public offering (IPO), it is a clause in an underwriting agreement that gives the underwriter the right to sell more shares to investors than the issuer had anticipated if demand for a security issue exceeds expectations.