"It is only today that we got approval from our board. We will now apply to SEBI for the same. The ticket size will be very small, of around Rs 1-2 crore, since these will be start-ups that are in need of seed money. The fund will act as a partner to the state government in supporting start-ups and aspiring entrepreneurs under the new industrial policy," said Harish Pattnaik, Director & CEO, GVFL, a veteran banker and private equity professional.
GVFL on Friday also announced the final closure of its Golden Gujarat Growth Fund - I, as on December 17, 2014 with a corpus of Rs 426 crore. The Fund life will be six years from the date of closing and exit is expected through secondary sale, promoter buy back, SME stock exchange listing. Moreover, the Fund is expects to provide good returns to the tune of over 20 per cent to its investors in time. Investments are mostly done through equity and structured products.
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According to Pattnaik, the focus of investment is private industrial park, renewable energy (wind and solar), and urban infrastructure, among others. Among the investments made by GVFL under the Golden Gujarat Growth Fund include Ratnakar Estate Developers Pvt Ltd - A private Industrial Park near Por Industrial Estate, Vadodara; Hubtown Ltd. Renovation of Bus Station cum Commercial complex at 4 centres in Gujarat namely Ahmedabad, Surat, Vadodara, Mehsana; Development of a 36 MW Windfarm Project of SITAC RE at Jasdan, Amreli, Gujarat; and Ushdev Power Holdings Private Ltd. (UPHPL) for acquiring operating wind power assets.
Elaborating on the investments, Pattnaik said that while the total size of the SITAC RE windfarm project is that of 200 Mw, GVFL has invested for 36 Mw only. "The project has signed a power purchase agreement (PPA) with GUVNL for 25 years at Rs 4.15 per unit," he said while adding that roughly Rs 40 crore has been invested in the project.
"The original size of the fund was planned at Rs 1000 crore. However, we later decided to close the fund at Rs 426 crore. Of these, around Rs 150.5 crore have already been invested while another Rs 200 crore will be invested in upcoming projects such as a solar project and a commercial complex in an SEZ area in Gandhinagar. In all, Rs 350 crore from the fund will be invested in 8-10 companies with an average ticket size of Rs 30-40 crore, while rest will be kept as reserves," said Pattnaik.
The Golden Gujarat Growth Fund - I was originally sponsored by Govt. of Gujarat in 2011 and investors in the Fund include Govt. of Gujarat, LIC of India, SIDBI, SBI, BoB, IFCI, UBI, Central Bank of India, Dena Bank, Bank of India, Syndicate Bank, SBH, SBM, SBT, NABARD, GIC, Oriental Insurance, New India Assurance and United India Insurance.
The Fund has also developed strong pipeline of projects and very soon intends to invest in a solar power project and one in an urban infrastructure project.
This being the seventh fund, Pattnaik said that three funds have been closed even as other three including SME Fund (Rs 90 crore), Biotech Fund (Rs 20 crore) and IT Fund (Rs 20 crore) are functioning currently.
Headed by Pattnaik, GVFL Board is now chaired by GC Murmu, IAS, CMD, GIIC Limited, apart from Maheshwar Sahu, Retd. ACS (Ind. & Mines Dept., Govt. of Gujarat), S B Dangayach and S C Sahasrabudhe as other members.