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Odisha to float Rs 100 cr venture capital fund

The fund is aimed at providing seed funding to start-ups in the MSME sector

Jayajit Dash  |  Bhubaneswar 

The Odisha government has decided to float a venture capital fund with a corpus of Rs 100 crore. The fund is aimed at providing seed funding to start-ups in the MSME (micro, small & medium enterprises) sector.

The state government’s contribution to the fund will be Rs 50 crore that will be disbursed in two tranches — Rs 25 crore in 2014-15 and an equal amount in Rs 2,015-16.

The residual amount of Rs 50 crore is expected to be raised from banks like Small Industries Development Bank of India (Sidbi) and also from state run companies.

Gujarat Venture Finance Ltd, a Gujarat government undertaking with 24 years of experience in venture finance, 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 state MSME department will develop a concept paper with support from successful venture capital models in the country.

An asset management company (AMC) will be formed with an authorised capital of Rs one crore in which the Odisha government will contribute 51 per cent. The rest 49 per cent will come from GVFL, employees of AMC and others.

The venture capital fund and AMC would start functioning in the next six months. There would be single point coordination of all activities relating to Odisha Venture Capital Fund. A memorandum of understanding (MoU) will be signed between GVFL and the state MSME department for creation of the venture capital fund.

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First Published: Mon, May 19 2014. 20:18 IST