India: South Asia Regional Apex Fund | Asian Development Bank

India: South Asia Regional Apex Fund

Evaluation Document | 28 December 2012
Validates the extended annual review report's assessment of the project which aims to provide venture capital financing for small and medium-sized enterprises and innovative projects at the start-up stage. The Independent Evaluation Department agrees with the project's overall assessment rating as less than successful.

In 1994, ADB approved the investment of Rs150 million ($4.82 million) in the equity of the South Asia Regional Apex Fund. The Fund was envisaged as an apex fund for Rs1.0 billion ($32.12 million) to seed state venture capital funds in ten selected states in India. The seed state venture capital funds would in turn provide risk capital to small and medium-sized enterprises in their respective states. Aside from ADB, whose investment represented 15% of the committed capital, the other original investors in the Fund included the following: International Finance Corporation (25%), Overseas Economic Cooperation Fund (25%), Industrial Development Bank of India (11%), Creditcapital Venture Fund (CVF) (11%), Abu Dhabi Investment Authority (10%), and NIF Management Singapore (3%).

The Fund's investments were targeted at small and medium-sized enterprises. These included innovative projects at the start-up stage as well as companies already in operation that need venture capital financing before going public. The projects may involve technological innovation, modernization, expansion or diversification, or may be export-oriented or companies needing turnaround financing. The portfolio also aimed to be diversified across industries and by type of project.

The project is rated less than successful.

This validation agrees with the issues, lessons, and recommendations identified by the extended annual review report. In addition, it was noted that the fund manager strayed from the original intent of the Fund to focus its investments in small and medium-sized enterprises and to invest in ventures with a view to taking the investee companies to the stock market. It is therefore recommended that ADB be more vigilant in monitoring and supervising fund managers of private equity funds to ensure that they adhere to the intended purposes and objectives of the Fund.


  • Project Description
  • Project Evaluation
  • Issues, Lessons, and Recommendations