Andhra Pradesh has launched India's first Biotechnology Venture Fund. Promoted and managed by AP Industrial Development Corporation Venture Capital Ltd (APIDC-VCL), the Fund was launched by Minister for Major Industries K Vidyadhar Rao in Hyderabad on Wednesday. An exclusive venture capital fund for biotechnology projects, the Fund would finance biotechnology companies planning to manufacture biotech products based on innovative and revolutionary processes.
The Biotechnology Fund is a unique public-private partnership as APIDC-VCL is a joint venture between APIDC and Ventureast, in which the latter owns 51 per cent and controls the management. The fund has set a target of Rs 150 crore, out of which Rs 35 crore had been already achieved. While the state government has contributed Rs 15 crore initially, Andhra Bank has invested Rs 10 crore and another Rs 10 crore came from LIC, which is expected to contribute an additional Rs 5 crore to make the total Rs 40 crore.
Sarath Naru, managing director of APIDC-VCL, said the Venture Capital company had already received about 60 proposals seeking fund support. However, the Fund had finalised 14 projects involving Rs 456 crore as suitable for funding. Of these three had been formally allotted funds. All the three were Indo-US projects and would work on biotech research and development (R&D), Naru said. All the three projects would get from Rs 1 crore to Rs 1.5 crore each and further funding would depend on the nature of work that was being carried out in the projects. The remaining 11 projects would be vetted by the investment committee of the Fund and finalised for investment soon.
Addressing a gathering of entrepreneurs and scientists at the launching of the Fund, the Minister lashed out at opponents of BT products like cotton, referring to them as 'vested interests' and asked the scientists to explain to the people the importance and benefits of biotechnology. If biotechnology was not promoted, India would lose a great advantage, particularly in the context of the WTO regime, where farmers would need to achieve higher production at lower investment levels, Vidyadhar Rao said.
The Minister handed over sanction letters to the three entrepreneurs who had been sanctioned the funds for research. The three companies were Genomic Design Pharmaceuticals Ltd promoted by Dr Rami Reddy (Rs 1.5 crore), Bioserve Biotechnology India promoted by M N Sastry (Rs 1 crore) and Silico Insight Biosciences promoted by Nandan Padukoe (Rs 1.5 crore).
S M Balasubramaniam, chairman, APIDC-VCL, said “the Fund operates primarily as a start-up and early-stage investor in business focusing on life sciences-related areas such as healthcare, drug discovery, agriculture, dairy, environmental and industrial applications. Our target is to take this Fund to Rs 150 crore. We have assurances from banks, financial institutions and investors and we hope to realise the target soon.”
B P Acharya, Secretary, Industries, read out a message from Chief Minister Chandrababu Naidu.
Ventureast took over majority control of APIDC-VCL in 1995. Now APIDC-VCL was in disinvestment mode and was projected to generate returns of 20 per cent on its venture portfolio as projected by Price WaterHouse Coopers. APIDC-VCL whose investors include the World Bank, IDBI, SIDBI, APIDC, Andhra Bank, IOB and various corporates has 18 companies in its portfolio. The Fund size in 1995 was $9 million.