Development of Venture Capital in India
Development of Venture Capital in India
Development of Venture Capital in India
VENTURE CAPITAL
IN INDIA
The government levied a 5 per cent cess on all know-how import payments to
create the venture fund.
AS PER SEBI.
AS PER INCOME TAX ACT,1961.
Continued
A VCF may raise money from any investor, Indian, Nonresident Indian or foreign, provided the money accepted
from any investor is not less than Rs 5 lakhs. The VCF
shall not issue any document or advertisement inviting
offers from the public for subscription of its security or
units
Continued
SEBI regulations permit investment by venture capital
funds in equity or equity related instruments of unlisted
companies and also in financially weak and sick industries
whose shares are listed or unlisted.
Continued
At least 80% of the funds should be invested in venture
capital companies and no other limits are prescribed.
Continued
A VCF is not permitted to invest in the equity shares of any
company or institutions providing financial services.
Continued
A Scheme of VCF set up as a trust shall be wound up
(a) when the period of the scheme if any, is over
(b) If the trustee are of the opinion that the winding up shall be in
the interest of the investors
(c) 75% of the investors in the scheme pass a resolution for
winding up or,
(d) If SEBI so directs in the interest of the investors.
Continued
The Income Tax Rule until now provided that VCF shall invest
only upto 40% of the paid-up capital of VCU and also not
beyond 20% of the corpus of the VCF.
Their primary ROI comes from capital gains although they also
receive some return through dividend.
SECTORS
MUMBAI
BANGALORE
DELHI
CHENNAI
IT , Telecom
HYDERABAD
PUNE
Bio-technology, IT , BPO
16000
14234
14000
400
387
350
12000
10000
300
299
280
250
8000
7500
6390
170
6000
150
146
4000
2000
110
78
56
1160
937
591
71
1650
200
100
2200
50
470
0
2000
2001
2002
2003
2004
Value of deals
2005
No of deals
2006
2007
With less opportunities for getting ROI investors tend to scale back,
adjust their investment focus and/or get more picky in funding
companies.
The investors that put money into their funds became less aggressive
during recession so it was harder for the VCs to raise money.
Future prospects of VC in
India
VC can help in the rehabilitation of sick units.
VC can assist small ancillary units to upgrade their technologies.
VCFs can play a significant role in developing countries in the
service sector including tourism, publishing, health care etc.
ICICIVEN TU RE CAPITAL
Deal sourcing
Deal evaluation
Investment
decision
Post-investment
process
Exit strategy
ICICIVEN TU RE CAPITAL
By sectors.
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Thank You
Presented By:DIGVIJAY TIWARI