TDB selects 13 cos under RDI fund's second cohort: Rajesh Kumar Pathak

TDB Secretary Rajesh Kumar Pathak talks about use of the fund, emerging areas of focus, safeguards against foreign takeovers, and measures to address conflicts of interest in the investment committee

The Technology Development Board (TDB), which promotes research, was established in 1996, but it came into the limelight as one of the second-level fund managers for disbursing the government’s ₹1 trillion research & development and innovation (RDI) fund. In his first media interview, TDB Secretary Rajesh Kumar Pathak tells Udisha Srivastav about the use of the fund, emerging areas of focus, safeguards against foreign takeovers, and measures to address conflicts of interest in the investment committee. Edited excerpts.

  

With the TDB celebrating its 30th foundation day this year, how has been its journey so far?

 Over the last three decades, the TDB has entered into about 450 funding agreements, committing over ₹3,260 crore for commercialising indigenous technologies.

 The nature of the companies approaching the TDB has changed considerably over the years. In the initial years, India’s startup ecosystem was at a nascent stage and the TDB’s portfolio largely comprised established technology-led companies and enterprises. With the rapid expansion of the startup ecosystem over the past decade, startups now constitute a significant share of the TDB’s new portfolio (at 50-60 per cent), alongside micro, small and medium enterprises (MSMEs), and other technology-driven companies.

 Our sectoral focus is deep-tech. If a company is at TRL 6-7 (Technology Readiness Level), where the proof of concept, testing, etc are done and are looking for commercialisation, then we fund them through loans.

 

What kind of returns have you seen from this investment? 

To date, the TDB has received approximately ₹1,200 crore as government support. After accounting for expenditure and other requirements, roughly ₹1,000 crore formed the capital base available for technology financing. However, against this base, the TDB has cumulatively committed more than ₹3,260 crore for technology commercialisation. 

This has been possible because it operates substantially on a revolving-fund model. Assistance extended to companies, particularly through loans, is repaid over time along with the applicable interest. These repayments flow back to the TDB and are subsequently deployed in new technology projects. Therefore, the same public capital has effectively been recycled through multiple generations of Indian technology companies.

 The multiplier becomes even more significant when we look beyond the TDB’s own commitment. Against the TDB’s cumulative commitment of over ₹3,260 crore, the supported projects represent an overall investment of more than ₹13,000 crore. Thus, the TDB’s capital has helped catalyse several times its own financial commitment in technology-led economic activities.

 Importantly, in the past few years, the TDB did not require fresh government grants for its regular funding because repayments and recoveries from earlier investments have enabled it to continue financing new projects. 

 

Under the RDI fund, how has the TDB utilised the allocated ₹2,000 crore? 

We have committed this amount to 22 companies, of which 14 are startups, five are MSMEs, and three are listed companies. In total, we have committed ₹2,192 crore, which is more than the ₹2,000 crore.

 While we have committed this amount, we have so far disbursed around ₹102 crore. The disbursement process will take two-three years, based on the duration of specific projects. Companies are able to match 50 per cent of the funding amount from non-government sources. We are now in the process of signing other agreements.

 

Apart from selected companies, what’s the status of other applications? 

We cannot enter into an agreement with a company if we don’t have funds, so we are waiting for further funds. But our second cohort is already in process. Once we get the money, we will announce that. So, we have not stopped our evaluation process. The second cohort has 13 companies, of which 11 are deep-tech startups. 

 

Is the government taking measures to reduce the chances of hostile takeovers by foreign companies? 

There are precautions mentioned in the implementation guidelines. One is that if a company dilutes above a certain threshold, around 20 per cent, it needs to take permission from the government. The guidelines clearly state that a company has to register its intellectual property (IP) in India. We are funding projects only with these conditions.

 

There has been concern about conflicts of interest in the investment committee. What safeguards are in place? 

There is no conflict as such. At the investment committee, we are talking of a super majority. Suppose there are nine members on the committee and two are left out due to conflict of interest. Even then, we need a configuration of 9-0, 8-1, or a minimum of 7-2. It cannot be 6-3, because we need at least two-thirds of the members to agree. 

 

Space-tech was one of the sectors that received significant investment in the first cohort. What are the new areas of focus? 

Yes, space tech is one of the focus areas. We will focus on emerging sectors like nuclear energy.