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Citigroup gives 1st venture loan in India
By agencies
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Friday, 02 September 2005, 19:30 IST
CHENNAI: CitiGroup India, which made its first venture lending globally in India by sanctioning $1.5 million to a Chennai-based BPO last week, is in negotiations with a clutch of small and medium companies in technology for similar funding deals.
"Venture lending is a new product from CitiGroup. As part of our SME strategy, we have engaged several good quality SMEs in technology, life sciences and media sectors in India for venture lending," Ajay Hattangadi, vice-president, CitiGroup Venture Lending, said.
Last week, CitiGroup India's corporate investment bank had announced $1.5 million venture lending to Secova eServices, a Chennai-based highly successful start-up company in human resources BPO (HRO) space.
This was the first such `venture lending' by CitiGroup globally and first of its kind deal by any banks in India, he said, adding that some other banks have done similar deals in other parts of the world.
"This is part of the CitiGroup's strategy to provide the much-needed capital for emerging companies," Hattangadi said.
Venture lending, which is a mix of a term loan and an additional pledge of stock warrants, is aimed at assisting the highly successful small and medium companies in getting an alternate source of funds without selling their equity to raise additional capital, he explained.
"We are looking at a good combination of strong management and proven track record to provide venture lending," he said, without revealing the names of the entities involved in the negotiations.