Dhanalakshmi Bank to float Rs 2,000-crore venture fund

Private sector Dhanalakshmi Bank plans to float a venture fund with a corpus of Rs 2,000 crore and will set up a wholly-owned subsidiary for the purpose, a top official said.

“We have obtained our Board approval for this business and will be approaching the Reserve Bank for its approval in about a week’s time. The venture fund’s corpus will be Rs 2,000 crore,” Dhanalakshmi Bank Managing Director and CEO Amitabh Chaturvedi said.

The bank will set up a subsidiary called Dhanalakshmi Bank Venture, he said. It plans to have a small investor base for the fund, “about 10-12 in all”, Chaturvedi said adding, “These investors could comprise institutions as well as high networth individuals (HNIs).”

The reason for floating this venture fund is that it would enable the bank to take a long-term view on investments, primarily in unlisted companies and start-ups, through this fund.

“As a bank, it will be risky to invest in start-ups and have a long-term exposure to them. With a venture fund, we can take a five-year view. Hence, our decision to set up this fund,” he said.