About the Fund

Hon’ble Finance Minister in his Budget Speech for FY 2014-15, in February 2014, announced the setting up of a Venture Capital Fund under the head Social Sector Initiatives vide para 38, which is reproduced below:

“In order to promote entrepreneurship among the scheduled castes and to provide concessional finance to them, IFCI will set up a Venture Capital Fund for Scheduled Castes. I propose to provide an initial capital of Rs. 200 Crore, which can be supplemented every year”

The said allocation was under Social Sector Initiatives in order to promote entrepreneurship among the scheduled castes and to provide concessional finance to them.

BRIEF FEATURES OF THE FUND

Financial assistance through:

  • Equity and Equity linked debt instruments (such as Compulsory Convertible Debentures, Optionally Convertible Debentures, etc.)

Investment Size in a company – Rs.0.20 Crore to Rs.15.00 Crore.

  • Financial assistance up to Rs.5 Crore - Investment shall be in the ratio of 75:25 (i.e. Fund investment: Promoters Contribution);
  • Financial assistance above Rs.5 Crore - Investment shall be in the ratio of 50:25:25 (i.e. Fund investment: Promoters Contribution : Bank / FIs Loan or by Promoters). Further the proposals forwarded by Banks / FIs with sanction of 25% of the total project shall be considered. In this case, the projects shall have to be compulsorily appraised by the Banks or other financial institutions.
  • Aggregate assistance not more than two times the current net worth of the company.
  • Returns on Equity instruments : 15% p.a. (for all SC entrepreneurs)
    • Returns on Debt/Convertible Instruments :
  • 8% p.a. (for all SC entrepreneurs other than Women and/ or Disabled SC entrepreneurs)
  • 7.75% p.a. (for Women and/ or Disabled SC entrepreneurs)
  • Investment Period in a Company: Up to 6 years including the moratorium period of not more than 36 months from the date of investment.