In a bid to boost the venture capital ecosystem for MSMEs in the country Small Industries Development Bank of India (SIDBI) has tied up with Life Insurance Corporation of India (LIC) for augmenting the capital support to enterprises in the country. Under Fund of Funds operations, SIDBI operates various Funds viz. India Aspiration Fund with corpus of Rs.2000 crore, ASPIRE Fund with corpus of Rs.60 crore and Fund of Funds for Startups (FFS) with corpus of Rs.10,000 crore.
During April 2016, Small Industries Development Bank of India (SIDBI) and Life Insurance Corporation of India (LIC) had signed Memorandum of Understanding to supplement funds under India Aspiration Fund The MoU with LIC was launched in the presence of then Minister of State for Finance, Shri Jayant Sinha in Mumbai. Under the MoU, LIC has earmarked an amount of Rs.200 Crore for investment. Under the MOU, as part of first phase, LIC and SIDBI have signed Contribution Agreements on January 03, 2017 in New Delhi with 7 Venture Capital Funds (VCFs), with an aggregate commitment of Rs.99.50 Crore from LIC. This is over and above commitment of Rs.162.75 crore already given to these funds by SIDBI.
In order to bring in more professional outlook, SIDBI constituted a Venture Capital Investment Committee (VCIC) comprising experts such as S/Shri H K Mittal Head, National Science & Tech. Entrepreneurship Dev. Board, Kiran Karnik former Nasscom Chief, Sanjeev Bikhchandani - Founder, naukri.com, Saurabh Srivastava Co-Founder, Nasscom and Indian Angel Network, Prof. R. Vaidyanathan IIM, Bangalore and T V Mohandas Pai, former CFO, Infosys.
There has been major upsurge in the activity during the current year as seen through growth in sanctions under Fund of fund operations. Commitments made by SIDBI in FY2015 and 2016 were- Rs.314.40 (11 funds) and 606.75 crores (19 funds) respectively. Compared to this, during the current year, SIDBI has so far accorded formal sanction already to 20 Alternative Investment Funds with aggregate commitments of Rs 714 crore. In addition there are further cases cleared by VCIC which are under detailed appraisal and due diligence. It may be pertinent to note that after constitution of VCIC in July 2015, out of 40 cases recommended by VCIC, 32 funds have already been given final sanction by SIDBI for an aggregate commitment of Rs. 1006.75 crores out of which 19 funds had announced first closing and have commenced investments.