SBI Venture eyes stake in private equity funds, startups

SBI Venture, the newly floated subsidiary of the State Bank of India (SBI), is likely to pick up stake in a host of start-ups and private equity funds in the country.

SBI Venture is a wholly owned subsidiary of SBI Capital Markets, a subsidiary of SBI.

Top sources in SBI said the bank was toying with the idea of a two-tier venture capital funding.

"SBI Venture will pump money into companies through a second venture capital fund. This is because SBI does not want to directly deal with private equity funds. If something goes wrong, the bank would be trouble," said a source.

According to the source, the corpus of the new venture capital fund is being worked out. However, it is learnt that the corpus could be close to Rs 1,000 crore. Currently, there are 24-25 venture and private equity funds in the country. ICICI Venture is the largest private equity-cum-venture capital fund with a corpus of more than Rs 1,000 crore.

IL&FS Venture Corp, Sidbi Venture Capital, Chrys Capital, ICF Venture, Feedback Venture, Jumpstartup Fund, Walden Equity, Srei Venture Capital are some of the other players in this space. Among private sector VCs, Jumpstartup is the leading fund with Rs 200 crore corpus. Walden, too, has a corpus of close to Rs 200 crore.

Private equity funds are currently investing in IT, ITES, pharma and biotech sectors.

"SBI strongly feels that it should play a role in the growth of new industries in the country by investing in private equity and venture capital," said the source.

It is also learnt that SBI is also contemplating entering the real estate sector. "There could be some kind of a tie-up with realtors but the bank is yet to chalk out the roadmap," added the sources.