SIDBI Venture Capital is nearing the close of its third venture capital fund mopping up Rs 1,000 crore ($214 million) from domestic financial institutions and banks. The Mumbai-based firm is in the middle of documentation work pertaining the final close and may complete the process this month, said a person familar with the development. The new fund, which is double the size of SIDBI Venture Capital’s last fund, has been anchored by parent SIDBI which has committed Rs 250-300 crore in the fund.
The rest of the amount has come in as commitments from public sector banks, insurance firms and other financial institutions. The new fund will also see SIDBI Venture Capital participating in large growth capital deals along with investments in small and medium enterprises (SME).
An email sent and calls made to SIDBI VC did not elicit a response at the time of publication of this article.
SIDBI VC, which typically targeted domestic investors for fundraising, launched its third fund last year. Several other PE players like ICICI Venture, Aditya Birla Capital Advisors, Reliance Alternate Advisors and Renuka Ramnath’s Multiples Alternate Asset Management have tapped significant capital from the domestic market since last year.
SIDBI VC is also learned to be in in talks with various portfolio companies for promoter buyback where exits through typical routes like M&A, IPO or a secondary sale are not working out. In these situations, SIDBI VC would get returns with a cap on internal rate of return (IRR).
SIDBI VC’s first fund was called the National Venture Fund For Software and IT Industry, which was a Rs 100 crore fund with Rs 50 crore from SIDBI, Rs 30 crore from the ministry of information technology and Rs 20 crore from IDBI.
This fund has seen several exits like software firm Skelta (acquired by Invensys in Apr ’10), software training firm karROX Technologies (in which Lumis bought stake), and business intelligence firm Manthan Systems.
Its second fund, which is an SME growth fund, had a corpus of Rs 500 crore and a life size of eight years. This fund has also seen some exits.