The Small Industries Development Bank of India’s (SIDBI) Venture Capital Investment Committee (VCIC) has approved requests from nine funds aggregating Rs 300 crore, an official here said.
“In its seventh meeting on February 11, 2017, SIDBI’s Venture Capital Investment Committee (VCIC) examined requests from 11 fund managers and sanctioned requests from nine funds aggregating Rs 300 crore,” an official statement of the Union Commerce Ministry said.
Last year, the government had set up a Rs 10,000-crore Fund of Funds for Startups (FFS) at SIDBI for contribution to various Alternative Investment Funds (AIF).
The government provided Rs 500 crore to the corpus in 2015-16 and Rs 600 crore was earmarked in the 2016-17.
“There is a significant upsurge in the fund of funds operations if seen from the number of funds supported by SIDBI during the current financial year (FY),” it said.
“During FY 15 and 16, sanctions were made to 11 funds (Rs 314 crore) and 16 funds (Rs 607 crore), respectively, while the number during the current FY has already crossed Rs 1,112 crore to 30 funds,” it added.
SIDBI’s VCIC includes external experts like Mohandas Pai, Sanjeev Bikchandani, Saurabh Srivastava, H.K. Mittal and Kiran Karnik, the ministry said.
SIDBI is also operating various other fund of funds programmes investing in MSMEs and start-ups, like the India Aspiration Fund (IAF) launched in August 2015, and ASPIRE Fund for MSMEs focused on agri and rural enterprises launched last year.
Of the proposals cleared earlier by VCIC, SIDBI has so far accorded formal sanction for a total of Rs 1,619.25 crore, including Rs 1,580 crore under IAF/FFS and Rs 39.50 crore under ASPIRE, the statement said.
“Operations under IAF and FFS are complimentary as both target startups and the exact coverage depends on the status of compliance to the guidelines under these funds at the time of signing of the contribution agreements,” it added.
According to the government, coverage under FFS is expected to stand at around Rs 600 crore in respect of 15 AIFs by March 31, 2016.
“The investment in startups by the 15 funds as aforesaid is likely to be approximately Rs 187 crore by March end,” it said.
There is now significant investment in startups with a rise in AIFs supported under various programmes, and the current year is expected to close with around 150 startups receiving Rs 588 crore, it added.
“It is expected that the investment in startups by the funds supported under FFS may cross Rs 1,200 crore over next twelve months as they raise the balance contribution from other investors and pick up the pace of investing,” the Commerce Ministry said.