Our fund has a pan-India character: Girish Gupta

Managing director & CEO, Rajasthan Venture Capital Fund

Having invested the entire corpus from its two funds, Jaipur-based Rajasthan Venture Capital Fund is gearing up to raise Rs 500 crore for its third fund. Girish Gupta, managing director and CEO, explains the company's future plans to Abhijit Lele. Edited excerpts:

What is the focus of your third fund?

The third fund is predominantly looking to provide equity support and seed funding to small-and-medium size enterprises (SMEs) and first-generation entrepreneurs in Rajasthan. However, we are not confined to this area; the fund has a pan-India character.

Would you raise the entire amount at one go?

The plan is to raise Rs 150-200 crore through the first round by the end of December 2014.

What kind of investors are you targeting?

We are approaching high networth individuals (HNIs), industrial houses, institutional investors such as commercial banks and overseas investors like pension funds and universities.

How would you tap HNIs?

We are approaching HNIs through wealth managers and those providing private banking services such as HDFC Bank and Anand Rathi Ltd.

The Rajasthan government is a key partner in the fund. What is its contribution to the fund?

The state government is active through the Rajasthan State Industrial Development & Investment Corporation and acts as an anchor investor for the fund. Its contribution would be about 15 per cent of the corpus (estimated at around Rs 75 crore).

The past two years have been tough for private equity and venture capital funds. How did it impact your performance and fund-raising activity?

Fund-raising was difficult in the environment marked by economic slowdown. However, exits are happening according to plan.

How many exits have you done till date?

The first fund, which was a pilot-level activity with a corpus of Rs 16 crore, made 10 investments, out of which exits have happened in nine cases. The latest is a tourism-sector company.

What is the outlook for FY15? How many exits are you looking at in FY15?

We are quite positive about the environment for fund-raising. The capital market activity has risen. There will be more SMEs which are eligible for funding. Out of investments from the second fund (Rs 150-crore corpus), we expect to exit from two or three investments.