The Hindu Business Line : Maharashtra signs MoU with 3 banks

FINANCIAL SUPPORT: (from right) Mr R.K. Gupta, General Manager, Punjab National Bank, with Mr Ashok Chavan, Minister of Industries, Maharashtra Government, Dr Kshatrapati Shivaji, Development Commissioner (Industries), Mr Narayanan Raja, Chief General Manager, SBI, and Mr Sunil Gulati, Group President, YES Bank, at the signing of MoU for the development of biotechnology in the State in Mumbai on Friday. — Paul Noronha

Mumbai March 23 Emerging and mid-size biotechnology companies wanting to set up business in Maharashtra will likely have better access to venture capital funding, loans, and financial advice from three banks in the State.

The Maharashtra Government on Friday signed a memorandum of understanding with State Bank of India, Punjab National Bank and YES Bank for this purpose.

The MoU will provide a framework for banks to provide funding to companies which want to set up their units in the biotechnology parks run by the Maharashtra Industrial Development Corporation.

Target spectrum

Mr Narayanan Raja, Chief General Manager of SBI, said the bank's venture capital fund is targeted at mid-size companies.

For the coming financial year, Rs 700 crore has been earmarked for funding biotech ventures across the country. Ventures from Maharashtra are likely to attract a major percentage of funding.

Mr Sunil Gulati, Group President of YES Bank, said the bank would like to offer funds to the whole spectrum of biotech companies — from contract research companies to biotech product distributors. The bank will look at both small and midsize companies. To attract more biotech ventures, the bank is also planning to launch a life science fund, he said.

Biotech parks

Since the formation of Maharashtra's biotech policy in 2001 a couple of biotech parks have come up in the State. A 136-acre biotech park at Hinjewadi near Pune has already been set up by MIDC, which is offering plots to companies for their research centres and other infrastructure. Another park is coming up at Khalapur on the old Mumbai-Pune highway.

Dr Kshatrapati Shivaji, Industries Development Commissioner, Maharashtra, said that small and midsize biotech companies are facing hurdles in raising capital, as banks are not willing to risk lending to them. The MoU will provide a funding platform for such companies, with the Government acting as a non-fiscal facilitator.

The State Industries Minister, Mr Ashok Chavan, said the MoU is expected to ease the key concern of getting adequate credit to biotech entrepreneurs.

More Stories on : Bio-tech & Genetics | Credit Market | State Bank of India | Maharashtra

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