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Our Bureau

Kolkata, Aug. 18 ICICI Bank is planning to launch a private equity fund for the small and medium enterprises (SMEs) soon, said Mr Sanjeev Sehrawat, General Manager, Business Banking Group, ICICI Bank, here on Monday.

ICICI Bank would form a special purpose vehicle to launch the fund, he said, adding it would have no linkages to ICICI Venture Funds Management Company, its private equity counterpart.

Speaking to presspersons at a seminar entitled ‘Alternative Avenues to SME Financing’ organised by the Confederation of Indian Industry, Mr Sehrawat said, “We plan to launch a private equity fund dedicated to the SME sector within five-six months by forming an special purpose vehicle in joint venture with a partner.” The corpus for the fund would be to the tune of $ 200 million, he added.

Mr Sehrawat declined to name the partner but hinted that it could be a foreign company.

“The advances to SMEs will grow faster than the rest of businesses in the coming days,” he said. Advances to SMEs currently constitute 8-10 per cent of its total advances.

Mr Jayanta K. Sinha, Chief General Manager, State Bank of India said SBI is also planning to launch private equity funds, which would focus on specific sectors such as infrastructure, etc.

“The project is still in an incubation stage,” he said. SBI has been extending advances to the SME sector over and above the growth target of 20 per cent, he said adding that it will total an estimated Rs 1 lakh crore to the sector in the next two years. SBI’s advances to the SME sector amounted to 76,329 crore as on 31 March, 2008.

Mr Varun Tuli, Group President, Business Banking, YES Bank said private equity funds mostly prefer sectors such as media, real estate and organised retail for funding. YES Bank has recently filed an application with SEBI for launching a couple of private equity funds.

One of them, dedicated to SMEs may be launched within six-eight months, he added. The average size of the funds will vary from $50-100 million.

More Stories on : Venture Capital | SSI | ICICI Bank Ltd

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