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Cabinet Clears ₹5,000 Crore Equity Infusion for SIDBI to Expand MSME Credit

The phased DFS funding is designed to preserve strong capital ratios given rising risk‑weighted assets from expanded digital and venture‑debt lending.

Overview

  • The Department of Financial Services will inject the capital in three tranches: ₹3,000 crore in FY2025-26 and ₹1,000 crore each in FY2026-27 and FY2027-28 at the prior year’s book value.
  • The first tranche is slated at a book value of ₹568.65 per share as of March 31, 2025, according to the government release.
  • Beneficiaries are projected to rise from 76.26 lakh at end-FY2025 to about 102 lakh by FY2028, adding roughly 25.74 lakh MSME borrowers.
  • Based on official MSME employment data, the government estimates the expanded lending could support about 1.12 crore jobs by FY2027-28.
  • The infusion is expected to help SIDBI maintain CRAR above 10.5% under high stress and above 14.5% under Pillar 1 and Pillar 2, while enabling branch expansion and new digital products such as working capital, invoice discounting, sector-specific and machinery loans, and venture debt.