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SIDBI launches venture fund for SMEs

Our Bureau


Mr S.S. Kohli, CMD, Punjab National Bank, with Mr V.K. Chopra, CMD, Small Industries Development Bank of India, at a press conference in Mumbai on Monday. - - Shashi Ashiwal

Mumbai , Oct. 25

THE Small Industries Development Bank of India has launched the SME growth fund, a venture capital fund with a corpus of Rs 500 crore, dedicated to the SME sector.

The fund has an eight-year tenor and has been established with the objective of meeting the long-term risk capital requirement of innovation and technology-oriented units in this sector, said Mr Ajay Kumar Kapur, CEO of SIDBI Venture Capital Ltd.

So far, SIDBI has tied up around Rs 375 crore for the fund, with participation from banks such as Punjab National Bank, Oriental Bank of Commerce, Bank of Baroda, Union Bank of India and Bank of India. Other banks are also soon expected to join in, he said.

The focus of the fund will be the software, biotech, pharma, design, R&D and outsourcing sectors, where VCs are evincing an interest, said Mr Kapur. The fund will invest in domestic SME units having superior growth potential, rapid scalability.

SIDBI along with seven major banks is setting up a credit rating agency for SSIs and SMEs which is expected to be operational by January 1, The idea is to develop rating models that help gauge the viability of units, in need of finance.

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