Alternative investors eye SMEs ahead of mainboard migration

Major alternative asset firms are devising strategies to invest in small- and medium-sized enterprises (SMEs), aiming to capitalize on liquidity differences when firms move from junior exchanges to mainboards.

- Agnidev Bhattacharya

Experts say that investors are looking for liquidity in the secondary market and are eyeing SMEs for better returns.

“India’s SME ecosystem is evolving rapidly, with several businesses demonstrating strong fundamentals, niche leadership and scalable growth potential,” said Hemant Daga, co-founder of Neo Group and chief executive of Neo Alternative Asset Managers. Neo is one of the alternatives firms tapping into the mainboard migration as an investment thesis.

“As an alternatives platform, we believe this space presents a significant opportunity for long-term capital, particularly for companies seeking strategic growth capital beyond traditional financing avenues,” he said. “Through our private credit funds, we channelize much-needed patient long-term capital to several SMEs in India, particularly in the manufacturing sector,” he said, without naming any company.