Himalaya Wealth Managers Bets ₹500 Cr on India’s Deeptech SME Opportunity

A new SEBI-registered fund is looking to back India’s niche, high-growth small and medium businesses in frontier technology sectors.

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Himalaya Wealth Managers LLP has unveiled its first alternative investment fund, Himalaya SME Scheme-I, registered under SEBI as a Category I AIF. The vehicle carries a total corpus of ₹500 crore,  comprising a base target of ₹250 crore alongside a greenshoe option of an equal amount.

The fund is yet to commence operations and is led by partners Deena Mehta, Manohar Lal Vij, Asit C. Mehta, and Jatin Tehri.

Rather than pursuing broad-based SME investing, Himalaya SME Scheme-I is focused squarely on businesses operating in frontier and emerging technology domains. These include aerospace and defence, industrial automation, healthcare and life sciences, agritech and food processing, electronics and semiconductors, as well as renewable energy and electric vehicles.

The fund will concentrate on growth-stage companies, those that already have validated, revenue-generating business models, rather than early-stage bets.

The firm is targeting a gross internal rate of return exceeding 20%, which it intends to achieve through disciplined deal selection, structured investment frameworks, and active post-investment support.

Deena Mehta, general partner and investment director, said the fund is designed to fill a funding gap for niche market leaders that show strong cashflow visibility, high customer switching costs, and durable competitive advantages. The goal, she noted, is to help these businesses transition into institutionally governed, high-growth enterprises.

The timing reflects two converging forces in India’s economy.

On the policy front, the government has signalled strong intent to support small businesses. In the Union Budget for FY26, Finance Minister Nirmala Sitharaman announced a dedicated ₹10,000 crore fund to nurture future champions among India’s SME community.

On the market side, India’s deeptech sector is experiencing a notable surge. In 2025, it ranked as the third most-funded startup category in the country. Startups in this space collectively attracted around $500 million across 87 deals last year, and momentum has carried into 2026 — with $166 million flowing into the sector in Q1 alone.

Private capital is increasingly aligning with this trajectory, and Himalaya SME Scheme-I appears positioned to ride that wave by zeroing in on the segment of deeptech businesses that sit between seed-stage and large-cap — often undercapitalised despite strong fundamentals.