The venture capital industry in India is likely to get a strong push with the proposed venture fund, the Rs 5,000-crore India Opportunities Venture Fund with Small Industries Development Bank of India (Sidbi). This is expected to enhance funds to the micro, small and medium enterprises (MSMEs).
Nitin Deshmukh, CEO, Kotak Private Equity, said, “With a corpus of Rs 5,000 crore, Sidbi can play a leadership role of a “Fund Of Fund" and catalyse setting up of several VC Funds focusing on MSMEs in the country. It can more specifically focus on capital starved sectors, such as biotechnology, social ventures, food businesses, rural businesses, agri businesses encouraging entrepreneurship across these sectors."
Vaibhav Gupta, associate director, tax and regulatory services, Walker Chandiok &Co said, “This would help the MSME sector to have better access to equity funds as these companies are generally not in a position to raise funds either through IPO or not big enough to attract private equity.”
Mahendra Swarup, President, India Venture Capital Association (IVCA) said, "Venture Capital is urgently needed by the small and medium sector to start new ventures and scale up existing ones. This segment needs to be expanded fast not only for innovative and high tech start ups but also for conventional industries. SIDBI should act as a Fund of Funds which will help grow domestic VC Industry exponentially.”
These negative list sectors are non-banking financial services other than NBFC’s registered with RBI and categorized as Equipment Leasing or Hire Purchase Companies; Gold financing (excluding Companies which are engaged in gold financing for jewellery); activities not permitted under industrial policy etc.