The two major venture capital funds of the Small Industries Development Bank of India (Sidbi) - the National Venture Fund for Software and Information Technology Industry and the SME Growth Fund - which support small and medium enterprises (SMEs) in the country, had disbursed Rs 540 crore until March 31, 2014.
The third fund - the India Opportunities Fund - which has a corpus of Rs 600 crore, has made a commitment of Rs 182 crore across 15 companies. This information was given by Kalraj Mishra, the Union minister of micro, small and medium enterprises, in a reply to a question in the Lok Sabha recently.
"Angel investment in India is still in its early stage and is not comparable to international levels particularly in comparison to the USA. However, access to angel funding in India is improving gradually," the minister said.
The government has allowed SMEs and start-ups to list on the SME exchanges without the mandatory Initial Public Offer (IPO) process, pursuant to which Sebi has permitted listing without an IPO and trading of specified securities of SMEs, including start-ups, on the Institutional Trading Platform (ITP) in SME exchanges.
"The move is aimed at providing a certain level of liquidity for early stage investments in SMEs/ start-ups and will also give Angel/VC investors an additional exit route," the minister said.
Number of companies listed on BSE SME platform as on July 31 was 63 and the capital raised by these companies stood at Rs 536.04 crore. The total turnover of these companies was Rs 2195.57 crore and their combined market capital was Rs 7,420.87 crore, the minister said.
Mishra said Sidbi had started the risk capital operations in 2008-09 under the MSME Risk Capital Fund (MSME-RCF) with a committed corpus of Rs 2,000 crore to ameliorate the problems faced by MSMEs in accessing capital and facilitate the extension of bank finance to MSMEs. Subsequently, the proposal to set up the India Opportunities Venture Fund (IOVF) of Rs 5,000 crore was announced in the Union Budget 2012-13.
SIDBI Venture Capital Ltd (SVCL), a subsidiary of Sidbi set up in July 1999, is an investment management company, presently managing four venture capital funds - the National Venture Fund for Software and Information Technology Industry, the SME Growth Fund, the India Opportunities Fund and the Samridhi Fund. These VC funds provide assistance to knowledge-based MSMEs.
