ICICI Venture Funds Management Co Ltd is planning to announce a separate venture dedicated to private equity and venture fund for Indian pharmaceutical and biotech sectors. The company is exploring the possibilities of channelising foreign funds from companies who are interested in VC and PE funding in Indian firms through this new venture. ICICI Venture is the largest PE and VC management company in the country.

According to highly placed sources, the ICICI fund could be the biggest ever VC fund announced for Indian pharmaceutical/biotech sector. The exact size of the fund is yet to be clear, sources added.

The priorities of ICICI Venture are known to be in four distinct areas of Life Sciences.

While biotech is to be given top priority, pharmaceuticals, healthcare and enabling technologies needed for all the three would be eligible for the funds.

Sources pointed out that ICICI has minimized the risks involved in VC funding by spreading out its priorities. While most of the funds in the biotech segment is to go for start up companies, pharmaceutical funding would be intended to help the restructuring of the existing infrastructure of the Indian units, who are to face the post 2005 challenges.

ICICI has identified healthcare as one of the biggest markets in the country and is concentrating more on funding the service sectors in the healthcare segment.

Recently, ICICI Venture has announced Rs 150 million India Advantage Fund, which again can be made use of by the life sciences sector.

Sources said that they already have 6 companies interested in availing the funds. Interestingly, there are 3 US based companies who are also seeking VC finds from ICICI to set shop in India. “The foreign companies will be interested in doing the backend work in India while having their corporate and marketing set up in the developed world. We would make sure that the foreign companies that are getting VC funds from us are bringing in employment opportunities and value added services to the country”, the sources said.

They felt that the role of ICICI in helping the foreign companies invest in the start up ventures in India will pay rich dividends as it would not only ensure more funds for the Indian industry, but also help the foreign countries have some good business. The foreign companies will find it difficult to set up their own offices here. We have the right system in place and their funds can be judiciously utilized through us. ICICI will be able to announce four to five times bigger an amount than it could have done individually through such a tie-up, they felt.