Mid-market enterprises: Powering India to new highs

India's entrepreneurial landscape has been witness to many a successful growth story. Rising above red-tape and bureaucratic inertia, businesses have gone on to tap the right opportunities, attract investments and transform themselves into powerhouses of growth. No wonder then that India's corporate sector is a force to reckon with -- one that has created numerous employment opportunities, flourished despite restricted access to capital and bolstered the country's economy.

Close on the heels of such large enterprises, another segment that is contributing to India's broad-based growth is the mid-market segment.

Steadfast, determined and persistent, mid-market enterprises have not only survived but also prospered despite hurdles in the form of insufficient capital and hostile policies. This segment dreams big and has global aspirations. Most of them have a good track record and are indigenous in nature. Such entrepreneurs are well aware of the ecosystems they operate in and the challenges facing them. They also know how to work around these challenges and succeed. Infrastructure problems and stalled reforms notwithstanding, this segment wants to grow and expand its geographical footprint.

For long, India's business scene was dominated by large and small enterprises. It was a case of extremes. The large businesses had grown over a period of many years and firmly established themselves, while the smaller ones were content with their limited offerings. Bridging this huge chasm and creating a middle ground were mid-market businesses. Combining the best of modern and traditional, these businesses refused to be cowed down by systemic inefficiencies and lack of capital. They overcame hurdles and in no time shed the 'small business' tag to become mid-market enterprises. With the government recognizing their contribution to the economy and lending them support, these businesses got a further impetus.

If the Indian economy is to prosper, it has to encourage the mid-market segment. From providing them easy access to capital to creating favourable policies, we must ensure a business-friendly environment for such enterprises to thrive. The new government's 'Make in India' campaign, fashioned with the intention of making India a manufacturing powerhouse, aims to tap into the potential of this segment.

Despite all the potential mid-market enterprises hold, there are hurdles impeding the growth of this segment. One of them is easy availability of capital. Ironically, while the mid-market segment forms a substantial part of India's corporate sector, it does not have smooth access to organized capital.

Large enterprises can approach public markets to raise equity and debt as per their requirement. They can also reach out to banks and other financial consortiums that will be more than willing to fund the expansion of such enterprises. However, mid-market businesses do not have it this simple. They have to either take the traditional route of approaching banks or resort to non-mainstream ways of sourcing capital. Private equity is usually never an option for such companies as the ticket size of the deals is not too high. Besides, for the number of due diligence practices that PEs follow, they rather chase large enterprises.

This leaves us with some pertinent questions: How is it that mid-market companies source growth capital? Whom do they approach for funds? Whom do they approach for customized financing solutions in line with their business needs? Who will help fund acquisitions that can help them scale their business? It is here that a company like GE Capital comes in the picture. With localized and customized solutions, GE Capital is committed to helping Indian mid-market businesses expand.

By way of loans and leases, GE Capital provides tailor-made solutions to mid-market businesses. Their expertise that spans industries helps them cater to businesses across the spectrum. They have a unique understanding of global dynamics given their experience in developed markets. As emerging markets too follow the same path, it helps GE Capital take bets on companies/sectors accordingly. The company is present across a range of sectors including healthcare, manufacturing, media, energy and aviation among others. GE Capital invests in sectors they know best and bring insight, knowledge and expertise to every loan.

Like when BILT Graphic Paper Products Ltd (BGPPL) needed a partner who was willing to support a long-term flexible financing solution, they reached out to GE Capital in 2013. BGPPL is a subsidiary of Ballarpur Industries Limited (BILT), the largest manufacturer of writing and printing paper in India. Keeping in mind BGPPL's requirements, GE Capital offered them a $25 mn long-term debt facility to refinance short term debt availed by the company. This helped the company manage its cash flows better.

Another example is when Alcatel-Lucent, the single largest supplier of digital switching in India for both Fixed and CDMA wireless lines, chose GE Capital as their partner for company car lease program. The company wanted to provide to its 600+ eligible employees a lease solution with transparent pricing and an easy buying option at the end of the term. GE Capital understood Alcatel-Lucent's needs and offered them an innovative operating lease structure. It doesn't stop here. GE's customer service ensured that all the employees of Alcatel-Lucent understood the lease structure and that their expectations were met. While these are just two cases in point, GE Capital's financial solutions have benefited numerous Indian mid-market companies across various industries.

India's mid-market holds tremendous potential and is raring to go. From adequate manpower to the right ideas, this segment has everything going for it. All it needs is access to capital; capital that will help it expand its footprint nationally and internationally, capital that will help it generate more employment. Once this aspect has been taken care of, nothing can stop mid-market enterprises from flourishing. Be it realizing the PM's 'Make in India' vision or reducing India's import dependency, there is nothing that mid-market enterprises cannot achieve.