Canara Bank arm launches Rs 500-cr venture fund

NEW DELHI: Canara Bank subsidiary Canbank Venture Capital Fund on Tuesday launched a venture fund with a corpus of Rs 500 crore mainly targeted at mid-sized unlisted companies.

"Encouraged by the successful performance of the earlier funds, Canara Bank, with the strong support of a number of public sector banks and institutions, has now launched the fifth fund of Canbank Venture Capital Fund with a corpus of Rs 500 crore," Canara Bank chairman AC Mahajan said after launching it.

The Emerging India Growth Fund is the fifth venture capital fund unveiled by the company. Venture capital is provided as seed funding to early-stage and high-potential growth companies.

Mahajan further said most of the PSBs including Punjab National Bank, Bank of Baroda, Oriental Bank of Commerce and Bank of India have contributed to the fund. Besides, development institutions like IFCI, Sidbi and United India Insurance Company have also made contribution.

Canara Bank provided the maximum Rs 100 crore to the fund, while OBC, IFCI have put Rs 50 crore each in the corpus.

Mahajan said the average size of investment is targeted at Rs 25-50 crore and the period of maturity of the fund is six years. The fund would focus on mid sized, unlisted firms and target significant minority investments in strongly led companies in fast growing sectors.

The fund would mainly invest in IT/ITES, biotechnology, pharma, telecom, healthcare, education, manufacturing and engineering, auto and auto components, infrastructure led sectors, among others.