The country's largest bank, State Bank of India's (SBI), venture fund initiatives have been put on a fast track. | |
| The bank's investment banking arm, SBI Capital Markets (SBI Caps), is now in talks with global investors for setting up two more venture funds "� a buy-out fund and an SME fund "� as it formally announced launch of its maiden fund jointly with Softbank Investment, a part of Japan's SBI Holdings group. The $100 million venture fund would target companies in the knowledge sector. |
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| These two funds will be part of SBI Caps' plans to get into risk capital space a in big way. SBI Caps was in discussion with global venture fund players having skills and financial strength. |
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| The SME fund would seek to invest in medium-sized companies (with turnover Rs 25-400 crore) gearing up for becoming Rs 1,000 crore companies. |
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| The corporate sector has shown improved financial health by revamping operations and taking benefits of low-interest rate regime. Now many of them including medium-sized companies are ready with investment plans to grow operations through organic route as well as mergers and acquisitions. |
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| Though corporates have a range of sources such as internal resources and loans to raise funds for M&As, the entire activity cannot be supported by debt only. Risk capital in the form of venture/ private fund is also used extensively worldwide, the official said. |
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| Meanwhile, SBI Caps fund for the knowledge sector will start operations next month. The fund will target typical investments in the $5-10 million range with a target holding period of 3-5 years. |
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| The knowledge sectors being targeted include BPO, KPO, life sciences, design and manufacturing, nanotechnology and environment technology. The fund has a two-year span to complete the investment process. |
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