SRI Fund Update: How Daughter Funds Work and What Founders Should Do Now

The Ministry of MSME held an awareness workshop on the Self-Reliant India (SRI) Fund on 4 November 2026 in New Delhi, as part of its Yashashvini Campaign for women entrepreneurship. Over 60 women entrepreneurs attended, along with ministry officials, industry associations, NSIC Venture Capital Fund Limited, SBI Ventures Limited, Daughter Funds under the SRI Fund, NITI Aayog’s Women Entrepreneurship Platform and the Atal Incubation Centre ALEAP Women Entrepreneurs Hub.

The ministry used the event to share how the fund has performed so far. Here is what was said, how the fund is built, and what it means if you are thinking about raising equity.

How the SRI Fund works

Dr. Rajneesh, Additional Secretary and Development Commissioner at the ministry, said the fund was conceived to extend equity support to MSMEs beyond traditional debt. ANI and Zee Business describe it as a fund-of-funds launched under the Aatmanirbhar Bharat package to provide growth capital to MSMEs.

The structure is the part founders most often miss:

• The Mother Fund invests only through Daughter Funds.
• The Daughter Funds are the ones that invest in MSMEs.
• SBI Ventures Limited is the investment manager of the SRI Fund.
• NSIC Venture Capital Fund Limited is the special purpose vehicle for the fund.

In plain terms, you cannot apply to the government for money from this fund. Any investment reaches you through a Daughter Fund. The Secretary said Daughter Funds take investment decisions on commercial lines, and that the government keeps an arm’s length from their day-to-day operations and plays no role in those decisions.

The numbers the ministry shared

On the size of the fund, the sources differ slightly. The ministry release speaks of a ₹10,000 crore commitment from the Government of India, with an expectation that private investors would contribute four times that amount. ANI and Zee Business describe the SRI Fund as a ₹10,006 crore fund.

Secretary Bharat Khera gave these progress figures:

• Commitments of ₹8,305 crore have been made against the ₹10,000 crore corpus.
• Nearly ₹48,000 crore has been leveraged from private venture capital and private equity funds.
• 72 Daughter Funds have been empanelled.
• Investments of ₹21,330 crore have been made in 824 MSMEs, of which about 74 per cent are micro enterprises.
• Of the enterprises supported, 77 have moved up to a larger category, six have been listed on stock exchanges, and 32 exits have been completed with profits.

Dr. Rajneesh added that, in several cases, investee enterprises had grown their turnover three to four times within two to three years and had gone on to raise further capital from private sources. These are the ministry’s own figures. The sources do not include any independent check of them.

Khera also placed the fund in a wider picture. Registrations on the Udyam and Udyam Assist portals crossed 10 crore on 30 October 2026, and 37.6 per cent of them were women-owned enterprises. He said he hopes to take that share to 50 per cent. He stressed that credit and equity must go together, noting that MSME credit outstanding had grown from about ₹10 lakh crore in 2014 to over ₹40 lakh crore, with non-performing assets in the sector falling to about 3.5 per cent.

More money: the budget top-up and the SME Growth Fund

Two other items were mentioned, and both come with very little detail:

• An additional ₹2,000 crore for the SRI Fund. Khera said this was provided in Union Budget 2026-27, for micro enterprises.
• The SME Growth Fund. He drew attention to the newly rolled out ₹10,000 crore SME Growth Fund, which will invest directly in small and medium enterprises.

The sources do not say who is eligible for the SME Growth Fund, how it will choose companies, or how to apply. They also do not say how or when the extra budget money will be deployed. Treat both as developments to watch, not as open applications.

What Daughter Funds look for

Khera said Daughter Funds look at business viability, growth over the last three years, and a business plan with positive cash flows. At the workshop, the Daughter Funds themselves listed their investment criteria:

• A strong market and a capable team
• A scalable model
• Audited financials
• Governance readiness, including a private limited company structure
• A clear use of capital

They also described the common steps to equity funding, from screening to due diligence and documentation. SBI Ventures’ MD and CEO, Prem Prabhakar, said equity is of strategic value to growing enterprises because it does not require collateral and because investors provide sector-specific mentorship and hand-holding.

Industry associations raised some concerns on behalf of early-stage women-led businesses: smaller ticket sizes, investment-readiness programmes in Tier-2 and Tier-3 cities, help with accounting and business valuation, and flexibility for founders who lack collateral or a long balance-sheet history. These were asks from the associations. The sources do not report any change in the fund’s rules in response.

How to reach a Daughter Fund

Participants asked how to approach Daughter Funds, how ready a proprietorship-run enterprise can be for investment, and about sector-specific funds. The sources do not report the answers to the second and third questions. On the first, officials said that details of the 72 Daughter Funds, including their sector focus and contacts, are available on the website of NSIC Venture Capital Fund Limited. No central application window or common form for founders was announced.

What this means for you

• Treat it as equity, not a grant. Daughter Funds invest on commercial terms. Expect questions about your market, team, model and use of capital.
• Get your records in order. Khera advised keeping proper financial records, and Daughter Funds named audited financials. Start now if your books are not clean.
• Look at your legal structure. Khera advised adopting a suitable legal structure, and a private limited company structure was named under governance readiness. If you run a proprietorship, ask the Daughter Fund directly how it views that.
• Build the three-year story. Prepare your growth over the last three years and a business plan that shows positive cash flows.
• Shortlist by sector. Use the NSIC Venture Capital Fund Limited website to see which Daughter Funds match your sector, then reach out through the contacts listed there.
• Remember the debt benefit. Khera said bringing in equity also improves an enterprise’s access to debt.
• Use the support around the fund. The Atal Incubation Centre ALEAP Women Entrepreneurs Hub and NITI Aayog’s Women Entrepreneurship Platform presented incubation, mentorship, market access, information on government schemes and compliance support. Associations also stressed linking capital with market access, including through GeM, ONDC and exports.

Sources: Press Information Bureau release from the Ministry of MSME; ANI (as carried by The Tribune and ANI News); Zee Business; Tripura Star News.

Cover photo: SUSHMITA NAG on Unsplash