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Economic Survey lauds role of venture funds
Wednesday, 07 July 2004, 19:30 IST
NEW DELHI: The venture capital industry has grown out of its infancy into a significant operation in India with investments of over 
14 billion ($314 million) in 409 projects, the annual Economic Survey said Wednesday.
Venture funds are also making profitable exits today, reducing the innate lag between investing in a start-up and obtaining monetary returns, said the government's survey, tabled in parliament.
According to the survey, the venture funds listed with the markets regulator were able to make 56 exits, of which four took the initial public offer route, and 16 others were direct buy-outs.
"This experience with 56 exits, which reflects investments made some years ago, suggests that the Indian venture capital industry has finished with the nascent stage where investments were being made but exits were unproven."
The world over, the survey said, the venture fund industry systematically delivers capital to entrepreneurs who have ideas for a start-up with no access to financial resources.
By adopting great risks in projects that often tend not to succeed, these funds also play a major role in encouraging first-generation entrepreneurship.
Now the same gains are beginning to reflect here as well with 44 venture funds registered with the Securities and Exchange Board of India (SEBI) as on March 31, with a corpus of 17.50 billion.
Of this, foreign investors brought in 2.3 billion and the total investments stood at 14.15 billion in 409 companies, the survey said.
The survey also said that only one in 10 venture funded projects go for an initial public offer, which would translate into 40 such offers in the country over the next two-three years.
"This is a significant number and highlights the economic significance of the venture capital industry as the breeding ground for the important companies of the future," the survey said.
Naming the five top venture funds in the country, the survey said ICICI topped the list with a corpus of 4.86 billion, followed by Infrastructure Leasing and Financial Services Limited with 2.11 billion.
The other three top funds were GVFL Ltd. with 1.03 billion, and IDFC and SIDBI each with 1 billion.
Source: IANS
14 billion ($314 million) in 409 projects, the annual Economic Survey said Wednesday.
Venture funds are also making profitable exits today, reducing the innate lag between investing in a start-up and obtaining monetary returns, said the government's survey, tabled in parliament.
According to the survey, the venture funds listed with the markets regulator were able to make 56 exits, of which four took the initial public offer route, and 16 others were direct buy-outs.
"This experience with 56 exits, which reflects investments made some years ago, suggests that the Indian venture capital industry has finished with the nascent stage where investments were being made but exits were unproven."
The world over, the survey said, the venture fund industry systematically delivers capital to entrepreneurs who have ideas for a start-up with no access to financial resources.
By adopting great risks in projects that often tend not to succeed, these funds also play a major role in encouraging first-generation entrepreneurship.
Now the same gains are beginning to reflect here as well with 44 venture funds registered with the Securities and Exchange Board of India (SEBI) as on March 31, with a corpus of 17.50 billion.
Of this, foreign investors brought in 2.3 billion and the total investments stood at 14.15 billion in 409 companies, the survey said.
The survey also said that only one in 10 venture funded projects go for an initial public offer, which would translate into 40 such offers in the country over the next two-three years.
"This is a significant number and highlights the economic significance of the venture capital industry as the breeding ground for the important companies of the future," the survey said.
Naming the five top venture funds in the country, the survey said ICICI topped the list with a corpus of 4.86 billion, followed by Infrastructure Leasing and Financial Services Limited with 2.11 billion.
The other three top funds were GVFL Ltd. with 1.03 billion, and IDFC and SIDBI each with 1 billion.
Source: IANS