The Rise of SME and Pre-IPO Venture Funds in India's Growth Story

21 October 2025

Here's what's happening: companies that have moved past their startup phase but aren't quite ready for the big leagues now have dedicated investors backing them. We're talking alternative investment funds that specifically hunt for opportunities in that middle ground – after the initial venture capital round but before the grand stock market listing, i.e, Pre-IPO

The growth trajectory is staggering. All AIFs had assets under management of approximately ₹45,000 crores in 2020. By June 2025, that figure exceeded ₹14,17,961 crores. (You can do the math-it's approximately 28% per year). Anyway, it is all about the numbers.

What's really driving this boom? Well, for starters, SEBI hasn't been sitting idle. The regulatory authority is making it easier for companies to access capital while ensuring investors aren't walking into disasters. Then there are the dedicated SME platforms on BSE (BSE SME) and NSE (NSE Emerge) – these weren't around a decade ago.SEBI reports that by September 2025, over 1,353 small and medium enterprises (SMEs) have been listed on the BSE SME and NSE Emerge platforms and raised more than ₹31,538 crore. This is happening as India pursues becoming a $5 trillion economy, at which micro, small, and medium-sized enterprises (MSMEs) contribute almost 30 percent to GDP, and 45 percent of exports.. 

       Source: Chittorgarh

       * indicates till September 2025 

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