Domestic Electronics Manufacturing Gets a Huge Boost, Govt Creates Rs 10k Crore Electronics Development Fund
In order to give a boost to domestic manufacturing of electronic goods and to encourage innovation among local manufacturers, Government of India has launched a special Electronics Development Fund (EDF) worth Rs 10,000 crore.
Canbank Venture Capital Fund, which is regarded as India’s oldest and first VC fund set up by a public sector unit will be the managing this corpus and ensure that it’s utilized in the right manner. Founded by Canara Bank, it has so far invested in over 112 firms and exited from 90 companies.
Canbank will be allocated Rs 2500 crore to start the process, which would be soon expanded as more resources pool in from other Govt. sectors.
S Thiruvadi, managing director, Canbank said, “We ourselves expected that there would be a slow response because we asked the funds to focus on only this sector… but the response has been good. We will absolutely leave it to the fund to decide on equity stake, investment etc.”
This announcement was made by J S Deepak, who is the Secretary at Department of Electronics and IT (DeitY). He was speaking the launch of Qualcomm’s Design in India initiative. As per Deepak, this corpus of Rs 10,000 crore under EDF would act as a ‘fund of funds’ so that VCs who are investing in electronics and technology niche gets ample support for promoting innovation and out of the box thinking.
Deepak said, “This fund is a fund of funds. This will fund venture capitalist who in turn will fund domestic companies in the field of electronics system design and manufacturing. We need to change present system of electronics manufacturing. It has to be rich in domestic Intellectual Property Rights..”
Canbank has already started talking with various VC funds for appropriate usage of EDF. Talks with Karnataka Information Technology Venture Capital (KITVEN)Fund, Rajasthan Venture Capital Fund and Walden International have already materialized.
As per reports coming in, this fund of funds of Rs 10,000 crore, would be first used for angels, early- and growth-stage funds who have attained a minimum ROI of 10%, and have been operational for 5-7 years. 20-25% stake would be claimed by this EDF for investing in any VC or idea.
As per various estimations, Canbank is looking at mid-stage companies having revenues in the range of Rs 100-200 crore for optimal utilization of EDF funds.
You can get more details about EDF from DEITY’s official website here.
