Nasscom, ICICI Bank float closed-ended fund

Mumbai: IT trade body Nasscom has partnered with ICICI Bank to float a closed-ended fund with an initial corpus of Rs 100 crore for investing in early stage companies and emerging technologies.

Christened Nasscom – ICICI Knowledge Park Innovation Fund (NIIF), the initiative will be supported by Tata Consultancy Services, Bharti Airtel and ICICI Knowledge Park (an ICICI Bank initiative with the Government of Hyderabad) as anchor investors.

Areas of investment

Commenting on the launch, Mr Kiran Karnik, the outgoing President of Nasscom, said that the fund would provide seed stage investments in areas such as wireless technologies, automotive infotronics, life sciences, energy conservation technologies and medical devices.

“While larger firms have the wherewithal to invest in innovation, start-ups and innovative young firms in India often fail to scale up due to lack of timely availability of seed capital,” he said.

In a bid to reach out to maximum start-ups who intend to develop intellectual property, the fund will make investments in the range of Rs 1-10 crore per company, said Mr N. Vaghul, Chairman, ICICI Group. This will enable the companies to reach a stage where they can attract follow on venture capital funding.

NIIF will operate as a separate commercial entity with the fund corpus being created through voluntary institutional contributions. A separate board and a team of professionals will be appointed to manage the day-to-day affairs of the fund, said Mr Nachiket Mor, President, ICICI Foundation.

Funding mode

While TCS has contributed about Rs 10 crore to the fund, ICICI Knowledge Park and Bharti Airtel have put in Rs 5 crore each. NIIF expects to attract investments from about 8-10 other institutional investors for the remaining corpus of Rs 80 crore. However, the return on investment made by companies contributing to the corpus has not been decided. NIIF will raise about Rs 150-200 crore in subsequent rounds. The fund will also target academicians, researchers and incubates looking to commercialise inventions. It will be fully operational by the end of the current quarter and subsequently fund the first company.