Canbank Venture, a wholly-owned subsidiary of Canara Bank, has a good portfolio of investments in several promising sectors. It has recently invested Rs 25 crores in clinical research firm Bioneeds. S Thiruvadi, Managing Director, Canbank Venture Capital Fund talks about the company’s future prospects to Usha Sharma
Recently, Canbank invested Rs 25 crores in Bangalore-based firm Bioneeds India. Apparently, this deal has been under discussion since the last three years. Why did it take so long and what were the reasons behind this delay?
The deal has not taken three years. The deal involved about a year of negotiations and concluded in June 2015. Thereafter, on due completion of investment procedures and compliance as per investment agreement, the investment was made in November 2015.
Tell us more about Emerging India Growth Fund. Reportedly, it has a corpus fund of Rs 435 crores. In which areas will the company invest? How important is the life sciences vertical in its growth strategy?
Emerging India Growth Fund is a sector agnostic fund and essentially invests in brownfield companies through equity and quasi equity instruments. It has already invested in several companies in sectors like engineering, healthcare, it, manufacturing, chemicals and consultancy etc. The life sciences vertical is seen as the growth vertical by the fund. Hence, we have some investments in companies operating in healthcare and clinical research organisation (CRO) segment. The commitment period of the Emerging India Growth Fund has already concluded and the fund is fully committed for investments as on date.
What are the unique opportunities and challenges of India’s CRO Industry?
We believe that the CRO industry in India is poised for a major take off. Several global multinational companies are looking at India to outsource their research requirements. Besides, abundant availability of skilled resources, lower labour cost and strong infrastructure make India a favoured destination for outsourcing CRO. The industry is facing the challenge of global players squeezing out mid-sized CROs. A maturity of the industry is expected to result in some consolidation in the sector.
How do you plan to leverage the existing potential of this industry and how would Bioneeds help you in doing so?
We are in the process of setting up a $100-million venture capital fund. This is envisaged to be a sector agnostic fund similar to emerging India Fund. The Bioneeds investment experience will enable us to look at profitable investment opportunities in CRO segment from the fund.
Are you in talks with any other pharma/ biopharma/ biotech companies? Are there any more deals in the offering?
We have been approached by some companies in the above space for investment. However, as the commitment period of Emerging India Growth Fund has concluded and the fund is fully committed, we propose to look at fresh investments in the sector once the new fund of $100 million is set up.
Who are the contributors in your fifth fund? What stakes do each of them hold?
We have 18 contributors in the fifth fund. This includes leading nationalised banks, SIDBI, IFCI and an insurance company.