Start-ups may get VC funding from this fiscal

Start-up firms in the micro, small & medium enterprises (MSMEs) sector can hope to get venture capital (VC) funding for their new projects as the state government has approved the proposed Rs 150 crore VC fund.

Odisha Venture Finance Ltd (OVFL), an asset management company has been formed to manage the venture fund called ‘Odisha MSME Fund.’ The fund would have a contribution of Rs 50 crore from the Odisha government. While the Government of India is expected to pitch in Rs 50 crore, the balance  Rs 50 crore is likely to be raised from banks.

The state MSME department has already signed a memorandum of understanding (MoU) with Gujarat Venture Finance Ltd (GVFL), a Gujarat government undertaking with 24 years of experience in venture finance. GVFL has been roped in as the partner and consultant for creation of the fund.

The onus will be on GVFL to take care of the regulatory, legal aspects and other formalities.

“The proposed Rs 150 crore VC fund has got the approval of the chief minister. We are soon going to have a meeting with GVFL to discuss the various modalities of the fund. Disbursements from the VC fund are likely to begin this fiscal”, said a government official.

GVFL has completed all the formalities and paperwork regarding the incorporation of OVFL. A bank account is required to be opened for OVFL. It has been decided to open the account with State Bank of India (SBI).

OVFL is being structured as a public limited company. The state government has nominated two directors in the board of the company- Panchanan Dash, secretary, state MSME department and Bibhuti Bhusan Behera, managing director, Odisha Small Industries Corporation (OSIC)