MUMBAI, May 27 -- Himalaya Wealth Managers has launched a Rs.500 crore SME-focused alternative investment fund (AIF) aimed at backing growth-stage businesses in sectors such as deeptech, aerospace, defence, industrial automation, healthcare, electronics and renewable energy, senior executives told Mint.

The Category I AIF, called Himalaya SME Scheme-I and registered with the Securities and Exchange Board of India, has a target corpus of Rs.250 crore with an additional Rs.250 crore green shoe option. The fund plans to invest in profitable small and medium enterprises seeking expansion capital rather than early-stage venture funding.

The launch comes as institutional investors increasingly look beyond traditional startup bets towards manu...