Canbank VC fund to raise Rs 500 cr by June

The fund is promoted by the state-run Canara Bank

Canbank Venture Capital Fund (CVCF), promoted by the state-run Canara Bank, is planning to raise Rs 500 crore by June from public sector financial institutions.

This will be its sixth fund to be invested in small businesses, a top company official said.

"We will be exhausting the fifth fund by August and therefore by May or June we will be raising a new fund of Rs 500 crore," managing director S Thiruvadi told PTI here.

Like its earlier funds, this will also be a sector-agnostic fund and will typically invest Rs 10-25 crore to take minority interest in companies, he said.

When asked about the investors, he said, generally it approaches state-run banks and insurers for commitments and will continue with the same for the new fund as well.

On promoter Canara Bank's contribution, he said it stands at 20 per cent for the present fund, and hinted that it will also be the same for the new fund.

The fund has exhausted over half the amount from its fifth fund and is planning to deploy the remaining Rs 250 crore by August, he said, exuding confidence that the team at the fund will be able to do that.

Thiruvadi said till now, the fund has delivered a 12 per cent return, and stressed that all the shareholders are satisfied with the performance so far.

The fund has already exited all the investments from the earlier funds, except in two companies located in Pune and Mumbai, where exits have been prolonged in spite of the investments having been made over eight years ago, he said.

Thiruvadi pointed out that the climate is very volatile in the last few years and as things start to look up, the fund will be able to deliver better returns.

CVCF had raised its first fund in 1989 and the fifth fund of Rs 500 crore in 2010, which was a quantum leap in terms of the total corpus.