International Finance Corporation is likely to take a 11.5 per cent stake in biotechnology venture fund, APIDC Biotech. |
APIDC Biotech's target size is $35 million and the proposed IFC equity investment is up to $4 million for capital contributions as well as management fees and expenses. IFC would play a critical roles in catalyzing international investment in APIDC Bio. |
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It will also contribute investment expertise in health, agribusiness, pharmaceutical manufacturing and life sciences on an on-going basis to the company. |
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IFC would in addition seek to induct best international practices in Biotech in terms of structuring as well as defining environmental and social standards to be followed by it. |
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The World Bank body would help APIDC Biotech set up an ethics committee to screen investments for potential ethical issues related to biotechnology. |
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According to IFC, the project would provide capital, strategic, financial, operational and technical expertise to 20-25 early stage biotechnology companies. |
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It would also attempt to introduce best international practices in life sciences R&D, production and services by developing links between Indian biotechnology companies and international partners. |
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The Biotechnology Venture Fund was floated in May 2003 to make equity, equity-related and mezzanine investments in start-up and early stage life sciences businesses in India. |
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According to sources, APIDC Biotech was the first fund in India to focus exclusively on the life sciences sector and will seek opportunities in areas such as health care, drug discovery, agriculture, dairy, environmental and industrial applications. |
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APIDC Biotech would take significant minority stake and build an investment portfolio of 20 to 25 companies with average transaction size of around $1-1.5 million. |
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The Fund was formed with a 10-year term and a 4-year commitment period. The Fund's two main sponsors were the Andhra Pradesh Industrial Development Corporation Limited (APIDC) and Dyman Ventureast. |
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In 1989, APIDC set up in a wholly-owned subsidiary to manage venture capital funds. |
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Later, in 1995, it privatised its fund management activity and organized a call for tenders for the selection of a manager. Dynam Ventureast Pvt Ltd was selected. |
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APIDC then floated formed APIDC-Venture Capital Ltd (APIDC-VCL), a joint venture between Ventureast and APIDC, in which the former held 51 per cent while 49 was held by APIDC. |
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