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Infotech

Electronics and IT
Industry

IT Revolution in
Punjab
- E-Governance
- Major Initiatives
- Fund Objective
- Fund Manager
- Investment Criteria
- Investment Instrument

- Disinvestment

The IT Policy

The future of IT
Industry

Telecom Policy

Special Incentives for
the Electronic
Industry

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Fund Manager

The fund is being managed by the Punjab Venture Capital Limited, an asset management company, promoted by the PSIDC acting as the nodal aganecy of the Goverment of Punjab.

Adding Value

The Fund will endeavour to provide the necessary management inputs towards developing the company's future direction & business strategies without either seeking management control or interfering in the running of the company. The fund will further provide to its investee companies, critical support in interfacing with State Agencies and in accessing additional funding to follow on growth opportunities. Moreover, the Fund will also provide a supportive role to the promoters through a representation on its Board of Directors.

Investment Instrument

The Fund's investment will be in the form of equity or quasi-equity/related instruments. In exceptional circumstances conditional loans/debentures may also be considered. The exact instrument will vary from case to case depending on the risk perception and the requirements of the investee company.

Investment Situations

The Fund's primary objectives is to make available venture capital to unlisted new companies and to cater to the growth and expansion of established companies in the information technology and related sectors. The Fund will also invest in turnaround and buy-out situations. The preferred business opportunities will include Software Services and Training , Internet Value Added Products and Services, Multimedia , IT Enabled Services and Value Added Communication Services.

Investment Criteria

The Fund is looking for projects offering potential for an attractive growth and earnings. Some of the parameters critical for Project selection are :
Management : A strong committed management team with a demonstrated track record and integrity.
Market : High growth potential in the market which the investee company seeks to serve. The market will need to be quantifiably large with growth opportunities especially in emerging IT areas addressing global markets.
Competitiveness : The investee company should possess the ability to develop and retain a long term competitive adventage through the use of technology. Return on Investments : Attractive capital appreciation with above average profitability

Instrument Range

The Fund will undertake individual investments in the range of Rs. 2.5 million to Rs. 20 million. Investments will normally be restricted to a maximum of 40 % of the company's equity in terms of number of equity shares subscribed to. Large investments may also be considered jointly with national funds.

Investment Horizon

The Fund will be prepared for an investment horizon of upto 5 years with the option for a quicker exit in case the situation warrants.

Disinvestment

The preferred exit route will be through a listing on the stock exchange within 5 years or as may be stipulated from the date of investment. The Promoter would be offered the right of first refusal of the Fund's holding at a market determined price.

Business Plan

While for a preliminary examination, a brief Project Profile indicating highlights of the project would suffice, a detailed Business Plan would be necessary before a final decision is taken. The importance of a good business plan can not be unrelated. Besides putting all the facts together, it also places them in a proper perspective and helps in assessment.

The Business Plan Should Include:

	Executive Summary - Brief details of the project and extent of financial support required.
	Resume of the promoters and key management team with references.
	Details of financial assistance, if already availed from any other funds or FI s/ Banks.
	Detail of associate companies/firms belonging to the Promoters.
	Capital outlay proposed and means of funding.
	Details of shareholding pattern , both existing as well as proposed, with details of the extent of interest of each shareholder/promoter.
	Human resources available as well as required in future alongwith details of stock option plans already existing for both management and Employees.
	Financial performance of the company (if applicable) for the past five years.
	Financial projections alongwith underlying assumptions.
	Technology tie-ups alongwith copies of agreements.
	Major clients alongwith details of orders executed for them as well as marketing stretegy proposed
	Details of overseas and domestic site offices, representative offices and subsidiaries/associates set-up abroad for marketing /offshore development.
	Competitive strengths as perceived by the promoters and the management.
	Implementation schedule.
	Risk Analysis.

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