India to overhaul $1.5bn fund of funds
Posted on 18 January, 2017 by Thierry Heles, editor
The fund, first revealed in January last year, was initially targeted at early-stage startups but it is now set to also target later-stage companies.
The Indian government’s department of industrial policy and promotion (Dipp) is changing the rules for the Small Industries Development Bank of India’s (Sidbi) Rs100bn ($1.5bn) fund of funds, LiveMint reported on Monday.
The fund of funds, first discussed in January 2016 before being officially launched in June, forms an integral part of prime minister Narendra Modi’s Startup India, Standup India program.
It was originally targeted at early-stage startups, but the country’s union cabinet has now overhauled the rules to enable half the capital to be provided to later-stage companies.
The fund has already received an initial tranche of Rs5bn, with another Rs6bn earmarked for the current fiscal year. The government expects the initiative could leverage up to Rs600bn in private investments and up to Rs1.2 trillion in debt financing.
The government hopes the vehicle will lead to the full-time employment of some 1.8 million people across the country.
Dipp is further considering to relax the rule that defines a startup as a company with less than Rs250m in annual revenues. It appears, however, that Dipp will keep the stipulation that a company needs to be younger than five years to qualify as a startup.
See more from this Government Report: India
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