Archive · 23 Sep 2025
Maharashtra Defence Fund: A Success Story with Uncertain Future
Imagine the government wanted to help small businesses that make things for the military, but they needed money.
Maharashtra created a special fund to give these businesses a boost.
This fund invested in many small companies, helping them grow and make more money.
Some of these companies became very successful, increasing in value significantly.
This shows that when small businesses get the right support, they can thrive.
The fund used a special kind of investment that gave businesses money without making them give up control too quickly.
However, the long-term success depends on more than just money, like political stability and more companies getting a chance.
The Maharashtra Defence and Aerospace Fund, launched in 2018, invested over ₹450 crore in 28 SMEs.
The fund aimed to support SMEs that faced challenges accessing capital for defense contracts.
The fund utilized Optionally Convertible Preference Shares (OCPS), a flexible financing instrument.
Several companies backed by the fund, like Paras Defence, have achieved significant valuations.
The long-term sustainability of this model hinges on sustained political backing and broader access.
- Who
- The Maharashtra government, IDBI Capital, and SMEs in the defense sector.
- What
- A defense fund was created to support small and medium-sized enterprises (SMEs) in Maharashtra's defense and aerospace sector.
- When
- The fund was launched in 2018 and began investing in late 2020.
- Where
- Maharashtra, India.
- Why
- To provide capital to SMEs, boost local defense manufacturing, and promote economic growth.
- Fund Name
- Maharashtra Defence and Aerospace Fund
- Launched
- 2018
- Initial Corpus
- ₹366 crore
- Companies Invested In
- 28
- Companies Gone Public
- 4
- Valuation of Public Companies (Sept 2025)
- ₹7,000 crore
- Key Instrument
- Optionally Convertible Preference Shares (OCPS)