With the Gujarat Venture Finance Limited (GVFL) receiving first tranche of Rs 200 crore from the state government, the venture capital (VC) firm is now aiming to raise around Rs 500 crore of its Rs 1000-crore infrastructure fund - Golden Gujarat Growth Fund Series-1 by June 30, 2011. What's more, GVFL is also in talks with domestic and international funding institutions like private equity companies, banks, insurance firms and pension funds to raise the remaining funds.
The first closure is expected by June 2011 with available funds of Rs 500 crore and the final closure will take place after a year, in June 2012. However, the company would start appraising project proposals and would start taking up due diligence of the infrastructure projects from May 2011 onwards.
"The first fund closure will take place by June this year. But simultaneously we will also start considering the prospective projects for investments. From May 2011 onwards we intend to initiate the process of due-diligence of the projects. We are hopeful to get funding commitments from the companies by then. Currently, the talks are on with domestic and international financial institutions," said H C Pattnaik, executive director, GVFL. So far GVFL has approached financial institutions like LIC of India, Asian Development Bank, SIDBI and a few international private equity firms.
Gujarat government will contribute 20 per cent of the total fund size, while anchor bank and anchor industry would contribute 10 per cent each for the fund. The remaining 60 per cent will be raised from domestic and international institutional investors. The state government has made a budgetary provision of Rs 200 crore for the fund in the annual budget 2011-12 presented in February.
State-promoted venture financing company, GVFL had announced the Rs 1000 crore infrastructure fund during the Vibrant Gujarat Global Investors' Summit 2011 held in January this year. The fund has been registered with Securities and Exchange Board of India (SEBI) and would invest in the companies from high-end small and medium enterprises segment to mid corporate firms having operations in infrastructure space and alternate energy including green and clean technology.
Some of the companies and investment bankers have already started approaching GVFL with investment proposals for projects development.
"We are receiving enquiries and investment proposals from investment banks and companies. But we have not identified any project so far. It will be decided after the due-diligence of the projects from May onwards," Pattnaik informed.
The seven year fund is expected to yield average internal rate of return (IRR) of around 20 per cent for the investors. The Gujarat government holds 56 per cent in GVFL through public sector units while HDFC holds 13.6 per cent. ICICI Group and other entities have around 20 per cent stakeholding in the company.
