Himalaya Wealth Managers LLP has unveiled a significant initiative with the launch of its SEBI-registered Category I alternative investment fund, Himalaya SME Scheme-I. This ₹500 crore fund is set to empower small and medium enterprises (SMEs) in India’s burgeoning deeptech sector. Given the strategic importance of deeptech in areas such as aerospace, industrial automation, and renewable energy, this move is poised to bolster the country’s innovation-led growth.
### Targeting High-Growth Sectors
Himalaya SME Scheme-I aims to fuel SMEs operating within frontier technology sectors, including aerospace and defense, healthcare, agritech, electronics, and renewable energy. With a base target of ₹250 crore and an optional greenshoe of an additional ₹250 crore, the fund sets out to achieve a gross internal rate of return (IRR) of over 20%. The strategy involves disciplined investing and structured transactions, focusing on SMEs with established business models and clear cash flow visibility. Deena Mehta, general partner and investment director at Himalaya Wealth Managers, emphasized the fund’s commitment to partnering with niche market leaders that exhibit strong competitive moats.
### Navigating the Competitive Landscape
The Indian SME landscape is experiencing a renaissance, with both the government and private sectors showing increased interest. The Centre’s recent announcement of a dedicated ₹10,000 crore fund for SMEs further underscores this focus. In parallel, the deeptech sector has emerged as a key area of investment, becoming the third most-funded startup segment in India in 2025. Private investment in deeptech, which saw $166 million in capital in Q1 2026 alone, highlights the sector’s robust growth trajectory. Himalaya Wealth Managers’ new fund enters a competitive space where firms are racing to back high-potential SMEs, leveraging the Centre’s push for innovation and entrepreneurship.
### Implications for India’s Startup Ecosystem
Himalaya Wealth Managers’ fund launch is a testament to the evolving opportunities within India’s deeptech sector. By targeting growth-stage SMEs, the fund not only provides much-needed capital but also aims to guide these enterprises towards institutional governance and sustainable expansion. This aligns with the national agenda of fostering “future champions” within the SME sector, crucial for driving economic growth and technological advancement. The fund’s focus on sectors critical to India’s strategic interests, such as defense and renewable energy, could lead to significant advancements in these areas.
Looking ahead, the success of Himalaya SME Scheme-I could inspire other investment firms to create similar funds, further enriching India’s startup ecosystem. For founders and investors, the evolving landscape presents both opportunities and challenges. As the fund begins its operations, stakeholders will be keenly observing its deployment strategies and the resultant impact on SME growth. This will be crucial in determining the fund’s role in shaping the future of India’s deeptech sector.
