Kerala's Islamic NBFC to launch venture capital fund

Date : Dec 18, 2013

KOCHI: Cheraman Financial Services Limited (CFSL), Kerala's Sharia-compliant non-banking finance company (NBFC), will soon launch venture capital fund (VCF) with a corpus of Rs 250 crore.

A P M Mohammed Hanish, managing director of CFSL, said the fund would be raised from institutional and individual investors within the country and outside. The regulatory body -- Securities and Exchange Board of India (Sebi) -- has granted permission for the launch of the VCF by CFSL.

To be named as Cheraman Premium Fund, the VCF will be deployed to support start-up initiatives and infrastructural projects.

"We have already received about 50 investment proposals seeking funds, and we will shortlist them to select about 10," Hanish told TOI here.

The maximum that a single investor will be allowed to contribute would be 25% of the corpus amount.

The state government-run KSIDC had launched VCF in collaboration with Small Industries Development of Bank of India (SIDBI) and Kerala Financial Corporation (KFC). The fund floated in 2000 with a target corpus of Rs 20 crore was closed in 2010.

"We could mobilize only Rs 7 crore then, as we had received only that much viable proposals then. Some of the investment norms fixed then had also limited the flexibility of the fund. This was another reason why it could not gain adequate momentum," a KSIDC official said.

Another Sharia-certified VCF was launched by the Kozhikode-based fund management company Secura Investment Management Company (SIMC) in 2011. The VCF named Secura India Real Estate Fund was launched mainly to support real estate projects. "We could mobilize Rs 50 crore and we see lot of potential for VCF in Kerala,'' T T Ajmal Ahammed , company secretary of SIMC, said.

He however said some of the norms recently introduced by Sebi went against the possibility of having a diversified portfolio.

"For instance, as per the latest Sebi norm the minimum contribution to the VCF now has been fixed at Rs 1 crore. When we launched the fund it was Rs 5 lakh. The number of potential investors would be limited with such a high ceiling on minimum investment,'' Ajmal Ahammed said.

Kochi; Cheraman Financial Services Limited (CFSL), Kerala's Sharia-compliant non-banking finance company (NBFC), will soon launch venture capital fund (VCF) with a corpus of Rs 250 crore.

APM Mohammed Hanish, managing director of CFSL said the fund would be raised from institutional and individual investors from within the country and outside. The regulatory body SEBI has granted permission for the launch of the VCF by CFSL.

To be named as Cheraman Premium fund, the VCF will be deployed to support start-up initiatives and infrastructural projects. We have already received about investment proposals seeking funds, and we will be short-listing them to select about ten,'' Hanish told TOI here.

The maximum that a single investor will be allowed to contribute would be 25 per cent of the corpus amount.

The state government-run KSIDC had launched VCF in collaboration with the Small Industries Development of Bank of India (SIDBI) and Kerala Financial Corporation (KFC). The fund was floated in 2000 with a targeted corpus of Rs 20 crore was closed in 2010.

We could mobilise only Rs 7 crore then, as we had received only that much viable proposals then. Some of the investment norms fixed then had also limited the flexibility of the fund. This was another reason why it could not gain adequate momentum,'' a KSIDC official said.

Another Sharia-certified VCF was floated launched by the Kozhikode-based fund management company Secura Investment Management Company (SIMC) in 2011. The VCF named Secura India Real Estate Fund was launched mainly to support real estate projects . We could mobilise Rs 50 crores and we see lot of potential for VCF in Kerala,'' T T Ajmal Ahammed , company secretary of SIMC said.

He however said some of the norms recently introduced by SEBI went against the possibility of having a diversified portfolio. For instance as per the latest SEBI norm the minimum contribution to the VCF now has been fixed as Rs 1 crore. When we launched the fund it was Rs 5 lakh. The number of potential investors would be limited with such a high ceiling on minimum investment,'' Ajmal Ahammed said.Source :-http://timesofindia.indiatimes.com/city/kochi/Keralas-Islamic-NBFC-to-launch-venture-capital-fund/articleshow/27551577.cms