MeitY Startup Hub onboards MergerDomo to strengthen start-up ecosystem in India
I can’t believe it’s been 3 years since I left the corporate world to start MergerDomo. This rollercoaster journey has been filled with various ups & downs but I am proud of what we have been able to achieve this year. MergerDomo now has over 1000 entities (SMEs/Startups, Investment Bankers, Consultants, Investors) across 52 sectors registered with us. This year till date we have closed 5 Startup funding deals and have achieved a deal flow of over Rs. 6000 Cr in the SME segment. Through our esteemed advisors, we have been able to develop expertise and guide various SMEs in the Pharmaceuticals, Auto Ancillary & ESDM sectors. MergerDomo is all set to catalyse growth of the SME segment with its diverse product suite, upcoming updates and a growing network on the portal. Furthermore, we’ve recently partnered with the MeitY Startup Hub (MSH) an establishment under the Ministry of Electronics and Information Technology (MeitY) which is an executive agency of the Union Government of India. This is to cross-leverage the two organisations’ resources and deep expertise in promoting and fostering entrepreneurship throughout the country. We have also actively participated in various events that have facilitated growth for MSMEs. You can expect to see us at every major event going forward.
Starting with our anniversary edition, we bring to you, MergerDomo’s take on various financial happenings along with comprehensive opinions from our in-house team of analysts. This is based on our market interactions and research.
Presenting MergerDomo’s Thought Corner, where our team of analysts present their opinions and views on Most significant developments relating to Business & Finance.
Factoring Act: Extending A Lifeline to the Beleaguered MSME Sector
The micro, small and medium enterprise (MSME) sector in India got a fresh lease of life earlier this month with the enactment of the Factoring Regulation (Amendment) Act, 2021. The amendment gives the sector better access to working capital as 9,500 non-banking financial companies (NBFC) can now offer factoring services – the use of receivables or unpaid bills to offer credit – to MSMEs.
The pandemic has hit the MSME sector in India hard, with bills stuck in receivables and credit sources drying up. The credit gap in the sector today stands at a whopping $240 billion (Rs. 17 lakh crore).
Companies Involved in Traditional Manufacturing
Industries such as consumer durables, trading, manufacturing, engineering, procurement and construction, pharmaceuticals, chemicals and automotive have significant portions of their revenue tied up in receivables. We expect them to benefit from the Factoring Act in a number of ways:
Benefit to NBFCs
It opens up a bigger market for NBFCs, who can now undertake factoring and participate in Trade Receivables Discounting System for discounting the invoices of MSMEs. Some benefits include:
We expect this legislation to contribute significantly and act as a “Booster” towards the financial health of the MSME sector. It is expected to have a direct impact on the livelihood of those associated with over 6.3 crore business units that fall within this sector.
This Month we have Mr Sanjeev Keskar, CEO Arvind Consultancy, Our Industry expert Who comes with over 2 decades of experience in the ESDM sector sharing his thoughts about the Indian ESDM sector.
Q: Do you see India Develop and become an integral part of the Global Supply Chain for the ESDM sector in the near future?
Sanjeev Keskar: Indian design services companies have already become leaders for both chip design and Embedded design global customers. Now the next phase is EMS activity for global companies from India and lastly, the components manufacturing ecosystem. If we focused on this roadmap, nothing can stop India from becoming an integral part of the global ESDM supply chain. Right now with the PLI (Production Link Incentive) program, we are developing a manufacturing ecosystem. The next step should be for improving local value addition by developing product design companies and component manufacturing companies. We must aim at improving our local value addition from current 15% to at least 50% for Electronics.
Q: What other relevant measures can the government take to expedite production and reduce our dependencies on imports for the ESDM sector post covid?
Sanjeev Keskar: Apart from Production Link Incentive Government must focus on improving local value addition in ESDM by making our innovative Startups/SMEs and Design based MSME companies successful. Startups in IOT and ESDM space are going through a challenge of end Market opportunities, we need to develop a system to support them financially/ Technically and for Sales/ Marketing. This should be the focus from Govt. to reduce import dependency and develop local ecosystem.
Q: How important is the success of the PLI scheme for the ESDM sector, with regards towards making India into a global Hub for the ESDM sector?
Sanjeev Keskar: PLI is important but it will create low value add manufacturing of ESDM, its success is important but we must focus on developing product companies and components manufacturing companies. Our local value addition must be more than 50% for the Electronics industry. Only PLI will not help to recognise potential of this sector which will be $400Bn by 2025 as per various reports.
Rossari Biotech,A specialty Chemicals Manufacturer,Plans to fund the investment through Cash only and No debt will be raised for the same.
Source: mint
API business of ISLL has diversified portfolio of 20+ products worth over 1530 Crore which is expected to create significant value for PI Industries.
Source: Business Standard
PAG will invest $145 million (approx ₹1,054 crore) to acquire a controlling stake in Acme Formulation, which focuses on complex pharmaceutical products.
Source: mint
It has around 200 beds. The company has conducted an aggregate of over 4,900 surgeries and provided healthcare services to over 65000 patients. The main objectives of the issue are expansion, funding inorganic growth initiatives and for general corporate purposes.
Source: ANI
SII will further improve their Supply chain by using Schott Kaisha valves, ampoules and syringes for their vaccine.
Source: mint
IPO consists of a fresh issue of ₹350 crore and an offer for sale of up to 10.77 million shares by Mandala Swede SPV that holds a 6.16% stake in the firm.
Source: mint
FSN E-Commerce Limited, the company that owns the Nykaa brand, has filed the papers for an initial public offering (IPO).The IPO is aimed At Consolidation And Strengthening Customer Base.
Source: mint
ITC will be investing in new growth areas such as sustainable packaging and its recently announced agri-focused super app as part of its ‘ITC Next’ strategy.
Source: FINANCIAL EXPRESS
Reliance retail ventures will end up with 40.95% stake in Justdial,the Internet B2B company.
Source: mint
The company said the acquisition is an inorganic step in its objective of building a complete digital Proptech Ecosystem.
Source: mint
For YouTube, the acquisition may lead to a larger access of creators, especially in simsim’s core markets of Tier-2 and -3 cities in India. Their main goal is to help SMEs transition to E-commerce by using video creators.
Source: VCCiRCLE
Deal would be the largest PE buyout in India, Outside Infrastructure. Carlyle aims to Borrow 1.2B in bridge financing for this acquisition.
Source: THE ECONOMIC TIMES
Raise Financial plans to launch products across categories, including financing, insurance, investments, payments, and wealth in the second half of 2021.
Source: TECHINASIA
Policybazaar is backed by marquee investors such as Softbank, Temasek, Info Edge, among others. It is seeking a valuation of $5.5-6 billion.
Source: mint
Deal may fetch Dabur owner ₹1,500 cr as it looks to raise funds for core business.The deal will see Burman family stake drop from 51% to 26%.
Source: mint
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Sector
|
Deal Type
|
Description
|
Deal Size
(INR Cr) |
Link
|
|---|---|---|---|---|
|
Pharmaceuticals
|
Buyside Acquisition
|
A Gujarat based Conglomerate is looking for strategic investment opportunities in Pharmaceuticals (API) in India
|
20-100
|
|
|
Pharmaceuticals
|
Sellout
|
Who-GMP certified Bulk Drug Manufacturing entity from Himachal Pradesh, India is looking to sellout
|
70-75
|
|
|
IT/ICT
|
Sellout
|
Information and Communications Technology-ICT (Computer Software) entity from India is looking to sellout
|
160-200
|
|
|
Automotive
|
Buyside Acquisition
|
An Automotive ancillary entity from India is looking for strategic investment opportunities in India, South Africa, Europe and USA
|
50-150
|
|
|
Product Licensing
|
|
An Automotive 2W Electric vehicle complete solution entity from South Korea is looking for licensing Product Technology
|
|
Sunny is working as Associate Vice President - Corporates/SMEs in the SMEs / Investment Banking division of MergerDomo. He manages consulting, M&A, debt and equity syndication deals for SME clients along with investor relations.
Taran Bedi is a Senior Associate in the Investment Banking division of MergerDomo. He helps investment bankers by finding the right counterparties for their clients.
Aditya is our Analyst in the investment banking division of MergerDomo handling Deal Sourcing, Consulting, Investment bankers & PE relationships.
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