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200 Cr VC Fund for SC Entrepreneurs; to fund upto 75 percent of small projects

Updated: Nov 28, 2015 02:32:39pm
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New Delhi, Nov 28 (KNN)To give a fillip to Prime Minister Modi's start-up India campaign, a Venture Capital (VC) Fund has been launched targeting Schedule Casts (SC) entrepreneurs.

For projects upto Rs 5 Crore,  the fund will provide financial assistance maximum upto 75% of the project cost and the balance 25% of the project cost will be funded by the promoters.

For projects above Rs. 5 Crore the investment shall be limited to maximum 50% of the project cost and at least 25% of the project cost has to be financed by bank/other institutions. Balance 25% of the project cost will be funded by the promoters.

Initial corpus for the Fund has been provided by the Department of Social Justice and Empowerment, Ministry of Social Justice and Empowerment and while the Fund is to managed is managed by IFCI Venture Capital Fund- a subsidiary of IFCI Ltd.

‘The eligible entity would be a Ltd/ Private Ltd company with 60 percent shareholding with SC promoters’ at least for last one year’ the communique said.  Further, Women entrepreneurs would be given preference, it says. 

According to IFCI, the SC promoters of Investee Company will not dilute their stake below 60% in the company till the exit under the scheme. However, in the event of any conversion of quasi-equity instrument under the scheme, strategic investments, buyouts etc, which result into dilution of stake of SC Entrepreneur, a prior written approval from Asset Management Company (AMC) would be required.

The scheme provide several Exit options such as  through payments out of operations, buyback/ redemptions by promoters / companies, strategic investments, listing at Stock Exchanges or any other exit process etc.

Any Proposal under the Scheme shall pass through two Committees  namely Screening Committee – to vet the eligibility criteria and the Investment Committee- to decide the quantum of assistance. 

As per Census 2011, the SC population is 20.13 Crore, which constitutes 16.62% of the total population in India. There is a huge potential in such a large economy like ours for such schemes out of which SC population can prosper and get opportunities to progress into the main stream.

Although, there is no reliable data on the profile of SC Entrepreneurs, but still, as per the rough estimates of various stake holders such as Dalit Indian Chamber of Commerce and Industry (DICCI) etc. there are 1000 Dalit entrepreneurs with combined turnover of Rs. Sixty Thousand Crore. There are approx. 50 companies with turnover of Rs. 10 Crore or more.

The details of the scheme are available at: http://www.ifciventure.com/Venture%20Capital%20Fund%20For%20Scheduled%20Castes

(KNN/ AB)

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