Hello everyone, welcome to The India Opportunity Show where you get a front-row seat to people building India’s future. We talk about unlocking the potential of the country with founders, investors, creators, and successful leaders from different fields to bring you real-life stories and behind-the-scenes of what it takes to be at the forefront of building the India Story.
Episode 1, Season 5 of The India Opportunity Show is out now! You can watch it on YouTube or listen on Spotify or Apple Podcasts.
India’s SME market has exploded in visibility over the last few years. But alongside the excitement around oversubscribed IPOs and spectacular listing-day returns, a more important question remains:
Can SME investing become a serious long-term asset class for Indian investors?
In this episode of The India Opportunity Show, I sit down with Shrikant Goyal, Co-Founder of Getfive and Fund Manager at Getfive Funds, a SEBI-registered Category I AIF focused on Indian SMEs.
An IIM Ahmedabad alumnus with over 15 years of experience across capital markets, fundraising and investment banking, Shrikant previously worked with Tata Capital and IDBI Bank before building Getfive.
After launching a ₹100 crore fund focused on Indian SMEs, he is now building a second ₹500 crore fund.
What interested me most about this conversation was that Shrikant doesn’t approach SMEs as a game of finding the next hot IPO. His philosophy is much closer to private-market investing: find a good business early, back the right promoter, and give the company enough time to compound.
Key Takeaways
1. SME investing shouldn’t be confused with IPO trading
A lot of the conversation around SME IPOs focuses on subscriptions, listing gains and momentum. Shrikant makes the opposite case: the real opportunity can emerge after listing, as promising businesses gain access to capital, professionalise and eventually graduate to the main board.
His preferred holding period can be three years or longer. The objective isn’t necessarily to sell after making 2x or 3x. It is to find businesses capable of becoming substantially larger companies.
2. In SMEs, the promoter may matter even more than the numbers
One of the strongest themes of our conversation was promoter integrity.
Shrikant has walked away from businesses where the industry looked attractive and the financial numbers worked because he wasn’t convinced about the promoter.
In a smaller company, where institutional systems and governance structures may still be developing, who is running the business becomes a fundamental part of the investment thesis.
3. The best SME investors may have to think like growth investors
We discussed how an investor can actually help a founder think bigger.
For some SMEs, accessing public capital isn’t merely a liquidity event. It can allow a business to expand capacity, enter new markets, professionalise its organisation and dramatically increase the scale of its ambition.
The interesting question therefore isn’t simply, “What is this business worth today?”
It is: “What can this business become?”
4. Multibaggers often require doing nothing
Investing is usually associated with action: finding the right entry, knowing when to buy and knowing when to sell.
But once you’ve identified an exceptional company at an attractive valuation, sometimes the hardest and most valuable decision is simply not selling too early.
Shrikant shares examples of businesses that moved from the SME platform towards the main board and explains why he would rather participate in that entire growth journey than celebrate an early 2x and exit.
5. The opportunity is real, but so are the risks
This isn’t an asset class where every fast-growing company deserves capital.
We get into financial red flags, missed projections, promoter behaviour, valuation discipline and the circumstances under which an investor should walk away.
For me, this is particularly important given the excitement around SME IPOs today. A growing market doesn’t eliminate the need for diligence. It makes diligence more important.
Chapters
00:00 Introduction
01:50 Why SME IPOs are misunderstood
05:01 Shrikant’s contrarian beliefs on SME IPO investing
07:17 Why SME companies struggle to attract long-term attention
11:46 Helping founders expand their vision
14:19 The iWare IPO turnaround
16:40 How a fund manager decides when to exit
19:34 From SME platform to main board: success stories
26:51 Why Shrikant walks away from good deals on paper
29:33 Financial red flags investors should watch for
35:13 What outlier companies have in common
40:17 Valuation and finding the right entry point
48:58 What happens when founders miss their targets?
56:39 Evergreen principles for SME investing
1:01:52 How investors should approach the asset class
1:03:34 How to evaluate an SME fund
1:05:45 Rapid Fire
One idea I’ll leave you with
The SME opportunity isn’t interesting because some companies can deliver extraordinary listing gains.
It’s interesting because India has thousands of small businesses that could potentially become significantly larger businesses over the coming decade.
Finding them early is one skill.
Having the conviction and patience to stay invested while they grow may be an entirely different one.
Watch the full conversation with Shrikant Goyal on The India Opportunity Show.
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Disclaimer: The content presented in this podcast is for informational purposes only and should not be considered financial advice. Viewers are encouraged to conduct their own research and consult with a qualified financial advisor before making any investment decisions.