SBICAP Ventures Ltd (SVL), a subsidiary of country’s largest lender State Bank of India (SBI), will establish the Trilateral Development Cooperation Fund (TDC Fund) with a target of around Rs 175 crore (around $20-22 million) to invest mainly in small and medium enterprises.
“The TDC Fund will route India's commitment of approx. Rs 175 crore (around $22 million) to the Global Innovation Development Fund (GIP Fund) - an alternative investment fund (AIF) proposed to be established in partnership with the Foreign, Commonwealth and Development Office (FCDO) under the India - UK Global Innovation Partnership (GIP),” SVL said in a statement.
TDC Fund, an agreement between SVL, Ministry of External Affairs and the government, will operate as a “Fund of Funds,” which is a pooled investment fund that invests in other types of funds including GIP Fund.
GIP Fund will target Indian innovation enterprises that are at an advanced stage but lack access to capital for overseas expansion.
It will invest in mainly small and medium enterprises from India that tackle development challenges and have successfully developed and tested viable social impact innovations that can be transferred and scaled up in third countries.
“The TDC Fund will demonstrate as well as reduce risk perception for innovation transfer. This collaboration will be a building block towards structuring investments into innovative enterprises from India and facilitate further development, transfer, and scale up of successful innovations to developing partner countries,” said Suresh Kozhikote, managing director & chief executive officer, SVL.
SVL, a unit of SBI’s merchant banking arm SBI Capital Markets Ltd, will act as the administrator-cum-adviser (investment manager) of TDC Fund and facilitate the GIP program for the Ministry of External Affairs. The ministry could potentially utilize the TDC Fund to contribute to AIFs similar to the GIP Fund.
SVL also manages Neev Fund II, a small-and medium-enterprises (SME) fund managed by SBICAP Ventures Ltd, that aimed to raise Rs 2,000 crore (around $265 million) to invest in climate action, sustainability and social impact businesses.
“Innovative Indian models are now maturing with learnings from existing markets and planning to move to new markets. GIP will help expand the footprint of Indian innovations abroad," said Sandeep Chakravorty, joint secretary (Europe West) MEA.