SIDBI issues bonds, raises Rs. 500 crores

SME micro-finance agency State Industrial Development Bank of India (SIDBI) has raised Rs. 500 crores by selling 10-year bonds to a state-run insurance firm.

The coupon on the bonds is 9.6%, payable annually. SIDBI plans to sell another Rs. 500 crores worth of bonds to other investors through a private placement, on the same terms as its deal with the insurance company. The issue is rated AAA by CARE, signifying the highest safety. Bank of America was the sole arranger for this issue.

Article in The Economic Times.

Govt contemplates Rs. 100 crore-venture fund for IT SMEs

The Ministry of Communications and Information Technology is considering creating a national venture capital fund to support small and medium enterprises in the IT segment. The fund is to be established by Software Technology Parks of India (STPI) and the Ministry has asked for a grant of Rs. 100 crores for the same. The VC fund would also mobilize resources from state governments and financial institutions.

The proposal has been sent to the Planning Commission for consideration. The initial corpus of the fund will be determined after the partners of the fund are finalized. The proposal comes as a follow up of the success of the Rs. 15 crore-Karnataka Information Technology Venture Capital Fund (KITVEN) created by the Small Industries Development Bank of India (SIDBI) and the Karnataka state government.

Earlier, the Ministry had contributed to the National Venture Fund for Software and IT Industry (NFSIT) set up by the Small Industries Development Bank of India (SIDBI) in 1999. The fund is likely to operate till 2009. NFSIT has invested in 30 small and medium IT enabled and software services and products companies.

Read The Economic Times article.