Presentation on theme: "FINANCIAL ASSISTANCE for Commercialization of Innovations BY NIRAJ KELA DIRECTOR TECHNOLOGY DEVELOPMENT BOARD DEPARTMENT OF SCIENCE & TECHNOLOGY TECHNOLOGY."— Presentation transcript:
FINANCIAL ASSISTANCE for Commercialization of Innovations BY NIRAJ KELA DIRECTOR TECHNOLOGY DEVELOPMENT BOARD DEPARTMENT OF SCIENCE & TECHNOLOGY TECHNOLOGY BHAVAN, NEW MEHRAULI ROAD NEW DELHI –
Department of Science & Technology Department of Scientific & Industrial Research Department of Biotechnology SOME SUCCESS STORIES -Hepatitis Vaccines -Energy from Municipal Solid Waste -Battery Operated Car, Indigenous Sedan / Station Wages Car -Epidermal Growth Factor -Passenger Air Craft, e-Governance TDB TIFACR&D Labs CEL NRDC For COMMERCIALIZATION OF TECHNOLOGY MINISTRY OF SCIENCE AND TECHNOLOGY CSIR R&D Labs Website: DST: DSIR: DBT:
TECHNOLOGY DEVELOPMENT BOARD GOI constituted TDB in Sept 1996 under the provisions of the TDB Act TDB provides financial assistance to the industrial concerns and other agencies for development and commercialization of innovative technologies. financial assistance in the form of Soft Loan, Equity or Grant-in-aid.
The Board takes a pro-active role to enhance exports and to produce competitive consumer products; It encourages industries and R&D institutions for product innovation or improvisation of socially relevant and profitable technologies that suit the Indian market; technology to be goal- oriented, socially relevant and profitable. It identifies the areas that requires strategic interventions. The Board encourages new ideas from small enterprises even at the risk of failures. Pro-Active roles
TDB FUNCTIONS AS DEFINED IN THE A CT :- Technology Development Board, would- 1.Provide equity capital, subject to such conditions as may be determined by regulations, or any other financial assistance to industrial concerns and other agencies attempting commercial application of indigenous technology or adapting imported technology for wider domestic applications; 2.Provide financial assistance to such research and development institutions engaged in developing indigenous technology or adaptation of imported technology for commercial application, as may be recognized by the Central Government; 3.Perform such other functions as may be entrusted to it by the Central Government
T ECHNOLOGY D EVELOPMENT S TAGES & TDB TDB operates in the niche segment of technology innovations / development & commercialization and not technology application Idea Generation Theoretical Modeling Concept Development and Prototyping Business Analysis Beta Testing and Market Testing Technical Implementation Commerciali zation Product or service TDB Non TDB
S EVEN S TEPS TO ( NEAR ) P ERFECTION
TDB F UNDING C HANNELS Soon: US Aid Corpus of Rs 200 crores for social innovations Integrated programmes for development and commercialization of technologies Soft Finance Seed Capital Support Support to Venture Capital Funds Technologies of National Importance To industrial concerns Technology Start up Companies Consortiums And like. Through Technology Business Incubators at Centre of Technology / Academic Excellence For financing Technology start ups. To consortium of Industry, Labs and Contract Research organization
TDB FUNDING CRITERIA Who can be funded ? o Commercial enterprises, startup companies (excluding sole entrepreneur/ proprietorship concern) Source of Technology o National Laboratories o In-house R&D unit of a company recognized by DSIR o Individuals holding IPRs o Adaptation of imported technology to wider domestic applications TDB is not Software Development Board neither it is Technology Application Board. Substantial nature of Technology Development is the mandate. Soft Finance to Innovating Companies Prototype Development should be completed
T ERMS & C ONDITIONS OF TDB F UNDING Term/ project Loan to commercial entities upto 50% of project cost to be incurred at the date of 5% simple interest Total project debt to equity of promoters/ partners ratio: 1.5 : 1. Disbursement in installments Moratorium of 1 year between disbursement and repayment Working capital not included. R & D / marginal Design development / software development charges not included : Technology should be ready for commercialization / proven at pilot plant level / beta level. Soft Finance to Innovating Companies
T ERMS & C ONDITIONS OF TDB F UNDING Term/ project Loan to commercial entities o 0.5 % for the duration of re-payment. o Implementation within 3 years o Customs duty exemption on import of R&D equipments o Soft Collaterals o Repayment in six monthly nine installments o No prepayment / commitment / processing charges. Equity in public entities upto 25% of project cost Grants-in aid to projects of national interest Soft Finance to Innovating Companies
W HAT CAN BE FUNDED : D EVELOPMENT AND COMMERCIALISATION OF New product/process/applicati on through indigenous technology. Significant improvements in the existing product/ process/ application. Development and deployment of technology or design to satisfy existing occupational health and/or safety standards, environmental requirements or standards current or anticipated. Soft Finance to Innovating Companies
Health & Medical Road Transport Air Transport Engineering Chemicals Energy and Waste Utilization Information & Communication Technologies Agriculture Partnership with TDB
TDB SUPPORT IS NOT AVAILABLE Soft Finance to Innovating Companies Refinancing Basic Research Establishment of new R&D centres Travel, Conferences, Workshops etc unless they form part of project approved by TDB Writing of books, reports unless they are essential component of approved project Mere creation of technical infrastructure More than 2 projects at a time to an industrial concern An industrial concern that is sick
TDB PROJECT APPRAISAL & FUNDING MODEL Loan application Upto Rs. 2.5 crores ( 10 copies) ISC YES NO 2 months Chairperson Soft Finance to Innovating Companies Personal hearing to the applicant Letter of Intent YES Delegation Stage 1
TDB PROJECT APPRAISAL & FUNDING MODEL Loan application Upto Rs. 10 crores ( 10 copies) ISC YES NO 3 -4 months Sub –Committee of the TDB Board Soft Finance to Innovating Companies Personal hearing to the applicant Letter of Intent YES Delegation Stage 2 PEC YES NO
TDB PROJECT APPRAISAL & FUNDING MODEL Loan application above Rs. 10 crores ( 10 copies) ISC YES NO > 4 months TDB Board Soft Finance to Innovating Companies Personal hearing to the applicant Letter of Intent YES Delegation Stage 3 PEC YES NO Financial Due Diligence NO
C OST OF THE P ROJECT Land Site Development Building/Civil works a. Factory b. Administrative c. Others Plant & Machinery a. Imported b. Indigenous Miscellaneous Fixed assets Technical know-how & Engg. Consultancy fee Cost of filing patents Contingency Margin money for WC TDB support is limited to 50% of the project cost to be incurred on the date of the application Debt: equity ratio of 1.5:1 Heads of expenditure Expenditure Incurred till the date of application Expenditure to be incurred Total Land Site Development Building / Civil Works (i)Factory (ii)Administration (iii)Others Plant & Machinery (i)Imported (ii)Indigenous Miscellaneous Fixed Assets Electricals Technical Know-how Fees Cost of filling patent(s) Preliminary &Pre-operative Expenses Marketing & Travel Expenses Others (specify) Interest during Construction Contingency Margin Money for working capital Total Soft Finance to Innovating Companies
M EANS OF F INANCE Status on date Additional Amount Proposed Total Equity Promoters Others (specify) Loan Financial Institution Bank Others (specify) Assistance from TDB Loan or Equity (specify) Total Soft Finance to Innovating Companies
Proposals are screened by Internal Screening Committee on the following aspects Point of view of Completeness of the Application Objective of the Project Status of the Technology Track Record of the Applicant Project Cost Submission of application Internal Screening Project Evaluation Signing Loan Agreement Project Monitoring Project completion & Repayment Soft Finance to Innovating Companies
Proposals are Evaluated by Project Evaluation Committee on the following criteria Soundness, Scientific Quality and Technical Merit Potential for Wide Application and the benefits expected to accrue from Commercialisation Adequacy of the Proposed Effort Capability of the R&D Institution in the proposed Action Network Organisational and Commercial Capability of the Enterprise including its Resources Reasonableness of the Proposed Cost and Financing Pattern Measurable Objectives, Targets and Mile-stones Track Record of the Entrepreneur Submission of application Project Evaluation Signing Loan Agreement Project Monitoring Project completion & Repayment Internal Screening Soft Finance to Innovating Companies
Signing of Loan Agreement Based on the recommendations of PEC, the Board may approve the project For bigger projects, due-diligence exercise may be conducted The terms of loan assistance may differ based on the type of project Loan agreements are signed at New Delhi An Agreement is signed in duplicate Submission of application Signing Loan Agreement Project Monitoring Project completion & Repayment Internal Screening Project Evaluation Soft Finance to Innovating Companies
Project Monitoring Project is monitored by PMC consisting of technical & financial experts Before each monitoring, the enterprise is required to submit the prescribed returns Monitoring of the project is done before release of subsequent instalment except the first. Monitoring is done to review the physical, technical and financial progress of project Based on the recommendations of PMC, next instalment of assistance may be released, or appropriate decision taken by the Board Submission of application Project Monitoring Project completion & Repayment Internal Screening Project Evaluation Signing Loan Agreement Soft Finance to Innovating Companies
Project Completion & Repayment On completion of the project, completion report is required to be submitted. Repayment is spread over a period of 5 years Repayment commences after one year of completion of the project Payment of accumulated interest is spread over 3 years commencing after one year from the start of the repayment All the payments/ repayments are payable at Delhi Submission of application Project Completion & Repayment Internal Screening Project Evaluation Signing Loan Agreement Project Monitoring Soft Finance to Innovating Companies
S EED C APITAL S CHEME TDB provides grants of Rs 1 crore to TBI / STEP managers. Grant to be used as Seed Capital (Loan and / or Equity) Beneficiaries: in house Tech start up companies. Transparent Framework Flexibilities of Terms
S EED C APITAL S CHEME Maximum grant by TDB : Rs one crore to the Corpus. TBIs/ STEPs must have for in-house tech start ups, physical infra and common facilities for them, Access to knowledge, mentoring, Access to Tech services, Manpower / expertise to manage, Policy
S EED C APITAL S CHEME Minimum: Rs 1 lakh, Maximum Rs 25 lakhs, Assistance as seed capital and not as Term / WC financing. Project Management Committee as the top Policy and approval body, No Lien Project Bank Account. Proper legal structure. Policy
P ROCEDURES Proposals YES 2 months TDB Chairperson Personal hearing to the applicant Letter of Intent Committee of Independent Experts
B EFORE APPLYING ……………. Advisable to Check eligibility and fitment into policies. Clear understanding of requirements. Top management commitments. Availability of physical, knowledge and manpower resources. Proper systems and processes. Adequate number of incubatees Quality of their projects. Pre-consultations with TDB, Peers.
Support for start-ups in incubators So far, TDB has provided financial assistance of Rs. 1 crore each to the following 36 STEPs / TBIs:- JSSATE – STEP, Noida VIT Vellore CIIE – IIM, Ahmedabad TREC-STEP, Tiruchirappalli SINE – IIT, Bombay PSG- STEP, Coimbatore SJCE- STEP, Mysore TBI- KEC, Perundurai, Erode SIDBI Innovation and Incubation Centre, IIT Kanpur ICRISAT, Pantancheru, Hyderabad NIT, Karnataka IIT, Madras, Chennai NCL, Pune Amity University Incubator, Noida Amrita TBI, Kerala SIDBI, IIT Kanpur Contd………..
TREC-STEP, Tiruchirapally JSSATE-STEP, Noida Manipal University, TBI, Manipal. NDBI, NID, Ahmedabad NIT, Calicut Technopark-TBI, Kerala IKP Knowledge Park, Secunderabad BITS, Pilani, Rajsthan FITT, IIT Delhi Villgro Innovation Foundation, Chennai Ekta Incubation Centre, Kolkata eHealth TBI, Bangalore IAN Incubator, New Delhi IIIT, Hyderabad S&T Park, Pune STEP, IIT Kharagpur IIT, Guwahati KIIT-TBI, Bhuwaneshwar CIIE-IIM, Ahmedabad MITCON-TBI, Pune Support for start-ups in incubators
TDB has provided financial assistance of Rs. 5 crores to the following 10 STEPs / TBIs in fifth round during :- Ekta Incubation Centre, Kolkata eHealth TBI, Bangalore IAN Incubator, New Delhi IIIT, Hyderabad S&T Park, Pune STEP, IIT Kharagpur IIT, Guwahati KIIT-TBI, Bhuwaneshwar CIIE-IIM, Ahmedabad MITCON-TBI, Pune Support for start-ups in incubators (5th round)
TDB has participated in venture capital investments with: 1.APIDC (APIDC-TDB Biotech Fund): Fund has been established to promote development and commercialization of indigenous technology in the field of biotechnology and related sectors. (Rs. 30 crores) 2.UTI-Ascent India Fund: Aims to take advantage of the favorable market conditions in India and also the upbeat domestic and international growth prospects of key Indian industries for making private investments. (Rs. 75 crores) 3.UTI –ITVUS Fund (Rs. 25 crores) 4.Ventureast TeNet Fund II (Rs. 15 crores) 5.GVFL Venture Capital (Rs. 15 crores) 6. RVCF Venture Capital (Rs. 15 crores) Joint Financing TOTAL:- Rs.175 crores
S.No.Sector Number of Agreements Total cost Sanctioned by the Board 1Health & Medical Engineering Electronics Chemical Agriculture Energy & Waste utilization Tele- communication Defence and Civil Aviation Road Transport Air Transport Information Technology Others Total Sector-wise coverage ( ) (Rs. in Crore) *As on 31 st March 2011
Loan, 73.15% Equity, 2.55% Grant, 9.38 % Venture Funds, 14.92% Break-up of TDB Investments Total Investment is Rs crores as on March, 2011
ACHIEVEMENTS OF TDB 15 years of rich experience in funding commercialization of new technologies and handholding with enterprises So far, TDB has signed 248 agreements with over Rs crore Leveraged more than Rs crore of external funding from FIs Projects are spread over 17 states / Union Territories and almost in all the industry segments TDB has emerged as a major promoter of first generation technopreneurs First Generation Technopreneurs need more managerial support and handholding
National Award for successful technology Technology Development Board has instituted a 'National Award for successful commercialization of indigenous technology' by an industrial concern. The National Award of Rs. 10 Lakhs each is given to the industrial concern that has successfully commercialized the indigenous technology and the developer/ provider of such technology.
National Award to a SSI unit for successful technology The Technology Development Board also provides a cash award of Rs. 2 lakhs to be given to a Small Scale Industry (SSI) that has successfully commercialized a product based on indigenous technology.
INVITATION ….. For further information, please contact : Secretary Technology Development Board Department of Science & Technology Wing-A, Ground Floor, Vishwakarma Bhawan Shaheed Jeet Singh Marg New Delhi – E: mail : Website: TDB look forward for Partnership/Networking Opportunities to Commercialize Innovations