“This is a very well structured fund and since it’s built on sectoral allocation, it will provide investment to startups in sectors which are not hot today for venture funds but will become hot in future”, said Sharad Sharma, cofounder of iSPIRT.
In a major boost to venture capital industry in the country, the Small Industries Development Bank of India (Sidbi) on Tuesday launched a fund of funds with total corpus of Rs 12,000 crore to finance the startup firms.
In addition to extending direct assistance to MSMEs in niche areas, viz, energy efficiency, cleaner environment and receivable finance for addressing delayed payments besides units in service sector, Sidbi also extends direct risk capital assistance to MSMEs in the form of sub-debt to address various needs such as promoter’s margins requirement, intangibles etc.
The fund is expected to catalyse tens of thousands of crores of equity investment in start-ups and MSMEs. “India is witnessing a start-up revolution and to harness the potential of India’s innovators and entrepreneurs a vibrant financial ecosystem is essential”.
Life #Insurance Corp of India, the nation’s biggest insurer, will partner with the #India Aspiration Fund, and co-invest along with SIDBI in venture-capital funds, officials said. India’s largest insurance company LIC will be a coinvestor in the IAF.
He also said there is a need to the ecosystem to transform India into a manufacturing power “There existed a gap between #policy making and India’s potential till now and people were asking why the desired steps were not taken in Parliament”, Jaitley said.
“I think in recent history, a mood for the government to take positive steps has never been so positive, as the kind we have seen in the last few days”, Jaitley said.
The Rs 10,000-crore SMILE scheme, which has built-in higher concessional terms for the enterprises promoted by scheduled caste (SC)/Scheduled tribes persons with Disabilities (PwD) and women, is expected to benefit around 13,000 enterprises with employment of almost 2 lakh persons.
SIDBI will provide 15 per cent of the total corpus, which will be mobilised by the start-ups through resources under IAF or fund of funds.
Rs. 753 crore of the Rs.2,000 crore ($305M) seed capital has already been sanctioned for the equity fund and disbursements have started.
“We will be providing funds under the scheme to sectors like IT, biotechnology and digital technology”, Shivaji added.