Odisha signs MoU with GVFL to set up venture capital for MSMEs

Reported by Chinmaya Dehury
Bhubaneswar, Sep 9:

The Micro, Small and Medium Enterprises (MSME) department of the Odisha government today signed a memorandum of understanding (MoU) with GVFL Advisory Services Pvt. Ltd., Ahmedabad for launching a venture capital fund in the name of “Odisha MSME Fund” in the state with a corpus of Rs. 100 crores.

The MoU was signed between MSME secretary Panchanna Dash and Director & CEO, GVFL Dr. Harish Chandra Pattnaik in the presence of chief secretary GC Pati.

Pati said that the Odisha MSME Fund will provide marketing and infrastructural and developmental support to MSMEs in Odisha. The registration of the organisation will be completed within the stipulated six months’ time.

While the state government, as sponsor of the proposed Fund, will invest around Rs. 50 crores, Rs. 50 crores more will be raised from banks, insurance companies, financial institutions and the Government of India.

Under this platform, a new asset management company will be created to manage venture capital funds in the state. This new Asset Management Company, which has been tentatively named “Odisha Alternate Asset Management Company”, will be a SEBI registered professionally managed company, said sources.

The sole function of the company will be to manage various VC and PE Funds that will be created in the state from time-to-time. The first such fund that will be created and managed by this company will be “Odisha MSME Fund”.

It will be a closed-ended fund with a life of six years or so. The fund will invest in equities and equity linked instruments in all sectors like IT/ITES, Biotech, Clean Energy, Clean Tech, Healthcare, Education etc.

Normal ticket size of investment will be Rs. 5- 10 crores. However, smaller and bigger ticket size investment depending on the need will be considered.

GVFL Ltd, which is a professionally managed Asset Management Company in the public sector, will provide consulting services like formation of various companies, Trust, SEBI registration, preparation of various legal documents and initial functioning of Asset Management Company to Odisha Government.