MAHARASHTRA'S AIF PLAY: A WELCOME TO ARMS

The state has quietly scripted an investment success with an outlandish bet on defence

- T. Surendar

When Ravalnath Shende signed a tentative order with Mazagon Dock Shipbuilders and Garden Reach Shipbuilders four years ago, his heart should have been pounding with excitement. The contract was worth ₹150 crore, nearly eight times the annual revenue of his company, Shree Refrigeration, which made specialized cooling systems for Indian warships.

But instead of exhilaration, Shende remembers feeling dread. His company, barely known outside Pune's industrial circles, had neither the working capital to finance such an ambitious order nor the collateral to persuade a bank to lend.

"I met more than 50 investors," he recalls. "Family offices, venture capitalists, even a few high-net-worth individuals. No one was willing to give us the valuation we deserved or lend us money. And I wasn't going to part with a big stake in my company just to survive."

Shende's predicament was not unusual. Across Maharashtra, dozens of small and medium-sized enterprises faced the same paradox: technically capable, sitting on orders from credible state-owned defence companies, yet unable to execute because they lacked capital. Banks demanded collateral, often personal property. Venture capitalists demanded equity at valuations founders considered insulting. And payments from defence clients came slowly, creating cash-flow mismatches that could cripple even the most promising companies. This was the invisible shackle hobbling India's defence small and medium-sized enterprises (SME) sector-the inability to scale when opportunity knocked, and the unwillingness of conventional financiers to take long-term bets.