Just as startups are key to the entrepreneurial ecosystem, investors also play a critical role. We have heard the investment philosophies of many known investors on YourStory. Today, we write about an investor that is a new entrant in the entrepreneurship space in India, and has been setup by a team that has rich financial advisory experience. Sarthi Capital Advisors was founded in 2009 and is a one-stop shop mainly focused on the SME sector. The company offers a range of services including investment banking, corporate & trade finance and advisory services among others.
The firm has been founded by Deepak Sharma, a veteran in the finance industry. Deepak has worked with IL&FS and TATA and had also served as COO & head wealth business for IL&FS Investsmart, he was also the CEO for SPA Capital Ltd. Deepak is supported by Anand Lakhotia who plays a key role at Sarthi. The firm has offices in Mumbai, Delhi, Pune, Ludhiana & Jodhpur. With a strong network of relationships, they work with clients across these markets.
Talking about starting up, Deepak says that after having spent two decades in financial services, he wanted to do something on his own. “I have been associated with firms which are big names today, but were startups when we started. We started IL&FS InvestSmart from scratch, grew it to a level, where HSBC acquired it to become HSBC InvestDirect. When I had joined SPA Capital, we started from a 300 sq. ft office and could take the business to great heights. Then I moved to Mumbai, joined IL&FS asset management business, which was a laggard and could successfully build and grow the business before its eventual sale to UTI,” says Deepak about his past.
However like most entrepreneurs, he wanted to build something on his own and decided to leverage his vast experience to start Sarthi. He was also nearing 40 years of age, and thought of using this stage in life to do something on his own. During his previous stints, Deepak had noticed the various service and advisory gaps that existed in many businesses and identified SMEs as the space of opportunity. “In a large and growing organization, professional support is there, people who can guide and take the business to the logical direction. But in SMEs this was lacking, we found this as a gap and created a business model to see how we can work with this,” explains Sharma. Sarthi operates in three verticals – transactions, capital market and advisory.
Sarthi started with the transaction business, therefore any form of transaction including buyout, sellout, or structured transactions for smaller businesses was the beginning. In 2010, when the government started SME Exchange, Sarthi also ventured into the SME Listing space to help take SMEs to IPO. They also received their license as Merchant Bankers and have already completed one issue since receiving license. Deepak estimates they will be helping atleast 10-15 SMEs this year through their Merchant Banking arm.
Sarthi Advisors has interest in mainly six sectors says Deepak, namely agriculture and foods, consumer based, clean tech and water, IT and ecommerce, and mobile related applications. While these are the board areas where they have identified the opportunity to lie, Deepak says they will evaluate other sectors if opportunities come by. “Because the markets are cyclical, the opportunities are cyclical and some opportunities like the consumer business I believe will stay for longtime, but in case of other businesses, opportunities will come and go,” he says. Sarthi invests upto $2 million per company and are willing to stay invested for a good number of years.