IFCI to set up $32M VC fund for scheduled castes

In order to promote entrepreneurship among the scheduled castes and to provide concessional finance to them, Industrial Finance Corporation of India (IFCI) will set up a venture capital fund worth Rs 200 crore, which can be supplemented every year, Finance Minister P Chidambaram announced on Monday in his Interim Budget speech (for other measures click here) for 2014.

Further details about the structure of the fund and how it would be it set up, were not disclosed.

Last month, the government had launched India Inclusive Innovation Fund with an initial corpus of Rs 500 crore, of which Rs 100 crore was committed by the ministry of micro, small and medium enterprises. The remaining Rs 400 crore will come from 12 public sector banks. This fund is styled as an alternative investment fund.

IFCI Venture Capital Funds, a fund housed under IFCI Ltd, provides finance to manufacturing, healthcare, IT solutions and green-field project companies in India.

In December 2012, the fund had invested Rs 10 crore ($1.8 million) in Sumeet Industries Ltd. Prior to that, it had invested around $0.4 million through optionally convertible debentures in Kanpur-based Regency Hospital Ltd. Its other investments include MSR Hotel Bangalore Pvt Ltd and SLS Power Corporation Ltd.

In the private domain, another social inclusion fund is being raised by Varhad Capital. The firm was set up by a team of IIM grads looking to raise India's first venture capital fund dedicated to Dalit businesses. The fund has a target corpus of Rs 500 crore over a 10-year period and the firm had managed to scoop up around Rs 42 crore out of the initial target milestone of Rs 200 crore as of November 2013.

(Edited by Joby Puthuparampil Johnson)

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