SIDBI eyeing ₹5,000 crore capital mop-up via rights issue in FY’25, says CMD Ramann

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SIDBI plans to raise capital to the tune of ₹5,000 crore next fiscal to fund its growth and would most likely adopt a ‘rights issue’ route for this purpose, S Ramann, Chairman and Managing Director, said on Tuesday. 

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It wants to raise the share of its MSME book in its overall lending to 25 per cent from 17 per cent and this would require additional capital, Ramann told businessline here. 

“We were only 7 per cent three years back. Now we are at 17 per cent. Ideally, we would like to touch 25 per cent. To get this growth, we would certainly need more capital in 2024-25,” he said, adding that additional capital mop up of ₹5,000 crore may not happen in a single shot (likely to be in tranches).

With government having 20 per cent stake in SIDBI, indications are that the government’s contribution to the rights issue may get allocated at the time of full-fledged budget in June-July, Ramann noted.

“With SIDBI having graduated to Basel III, we need to get that additional capital flowing in. Within the next financial year, we must get the additional ₹5,000 crore capital. Otherwise we will not be able to absorb more and more of MSME borrowing,” he said. 

SIDBI expects to close the current fiscal with overall loan book of ₹5.2-lakh crore and has already crossed ₹5-lakh crore, he noted. 

Currently, SIDBI is capitalised at ₹560 crore and has net worth of ₹32,000 crore. 

JAN AUSHADHI KENDRAS

Meanwhile, Mansukh Mandaviya, Union Minister for Chemicals and Fertilizers and Health and Family Welfare inaugurated a credit assistance program for Jan Aushadhi Kendras here on Tuesday.

In this regard, he presided over the exchange of an MoU between Small Industries Development Bank of India (SIDBI) and Pharmaceuticals and Medical Devices Bureau of India (PMBI). Mandaviya also launched a website for credit assistance to Jan Aushadhi Kendras.

From only 80 Jan Aushadhi Kendras in 2014, there are now around 11,000 units operating across the country today, said Mandaviya adding, “It is estimated that 10 to 12 lakh people visit Jan Aushadhi Kendras every day, providing them with significant savings and access to requisite medicines. The MoU between SIDBI and PMBI would emerge as a blessing for small and new entrepreneurs as it has the potential to further strengthen and modernise the network of Jan Aushadhi Kendras in the country”, he added. 

It has now been decided to increase the geographical reach of this facility by increasing the number of Jan Aushadhi Kendras to 25,000 in next 2 years. Under the MoU, project loans for a credit limit up to ₹2 lakh at a very competitive and affordable interest rate will be offered by SIDBI for small entrepreneurs of Jan Aushadhi Kendras. 

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Besides business loan, SIDBI would also extend unsecured working capital assistance to such entrepreneurs through its GST Sahay programme, Ramann added.