1.5 B biotech venture fund set up

Monday, 26 May 2003, 07:00 Hrs
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NEW DELHI: APIDC Venture Capital Ltd., a joint venture between privately-owned Ventureast and the Andhra Pradesh Industrial Development Corporation, Friday announced the launch of a 1.5 billion venture fund for the biotech industry.

The fund will mainly invest in start-up biotechnology businesses that are working in the areas of healthcare, drug discovery, agriculture, dairy, environmental, and industrial applications.

"The fund will make investments in about 20 to 25 biotechnology ventures during the initial three to four year period and begin divestment thereafter," said Sarath Naru, managing director of APIDC Venture Capital Ltd.

"Biotechnology is an ideal candidate for venture capital investment. It is a relatively new industry and a number of future drug discoveries are expected to be born in small start-up companies," he told a press conference here.

Naru said the fund has already raised 350 million, of which Andhra Pradesh government had invested 150 million, Andhra Bank 100 million and public sector Life Insurance Corporation of India had committed 100 million.

N. Rangachary, chairman of the Insurance Regulatory and Development Authority (IRDA), said the insurance companies should start investing in venture capital fund as long-term investment.

"In the developed markets such as the U.S., insurance companies have as large as 10 percent exposure to venture capital funds. Pension funds and insurance companies account for almost three fourths of all investment in venture capital funds.

"In India, insurance companies have invested less than one percent in venture capital funds," he said, adding Indian insurance companies are beginning to form guidelines and policies to evaluate venture fund investments.

India's biotechnology industry, estimated at $1.8 billion 1998-99, is expected touch $2.2 billion by 2005 and $4.3 billion by 2010, according to the Confederation of Indian Industry.

Experts say India's vast trained scientific talent, knowledge of cutting-edge IT skills, and human and plant diversity can help the country exploit the opportunity offered by biotechnology.

Source: IANS
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