financial assistance for commercialization of innovations by niraj kela director technology...
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FINANCIAL ASSISTANCE for
Commercialization of Innovations
BY
NIRAJ KELA
DIRECTOR
TECHNOLOGY DEVELOPMENT BOARDDEPARTMENT OF SCIENCE & TECHNOLOGY
TECHNOLOGY BHAVAN, NEW MEHRAULI ROADNEW DELHI – 110016
www.tdbindia.org
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 TIFAC R&D Labs
CEL NRDC
ForCOMMERCIALIZATION
OF TECHNOLOGY
MINISTRY OF SCIENCE AND TECHNOLOGY
CSIR
R&D Labs
Website:
DST: www.dst.nic.in
DSIR: www.dsir.nic.in
DBT: www.dbt.nic.in
TECHNOLOGY DEVELOPMENT BOARD
• GOI constituted TDB in Sept 1996 under the provisions of the TDB Act 1995.
• 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 ACT:-
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
TECHNOLOGY DEVELOPMENT STAGES & 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
Commercialization
Product or service
TDB
Non TDB
SEVEN STEPS TO (NEAR) PERFECTION
TDB FUNDING CHANNELS
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 Technologyo National Laboratorieso In-house R&D unit of a company recognized by DSIRo Individuals holding IPRso 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
TERMS & CONDITIONS OF TDB FUNDING
• Term/ project Loan to commercial entities
upto 50% of project cost to be incurred at the date of application
@ 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
TERMS & CONDITIONS OF TDB FUNDING• Term/ project Loan to
commercial entities
o Royalty @ 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 Collateralso 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
WHAT CAN BE FUNDED: DEVELOPMENT AND COMMERCIALISATION OF
• New product/process/application 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
COST OF THE PROJECT
• Land• Site Development• Building/Civil
worksa. Factoryb. Administrativec. 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
incurredTotal
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
MEANS OF FINANCE
Status on date
AdditionalAmount
ProposedTotal
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
SEED CAPITAL SCHEME• 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
SEED CAPITAL SCHEME
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
SEED CAPITAL SCHEME
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
PROCEDURES
Proposals
YES
2 months
TDB Chairperson
Personal hearing to the applicant
Letter of Intent
Committee of Independent Experts
BEFORE 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 2011-12:-
• 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
1 Health & Medical 63 885.08 277.03
2 Engineering 50 466.56 161.4
3 Electronics 2 35.51 9.75
4 Chemical 19 154.44 50.98
5 Agriculture 19 125.18 40.52
6 Energy & Waste utilization
8 132.36 55.98
7 Tele- communication 11 90.04 33.85
8 Defence and Civil Aviation
1 8 2.20
9 Road Transport 10 527.04 81.20
10 Air Transport 2 142.1 67.80
11 Information Technology 32 274.98 112.01
12 Others 31 682.83 199.50
Total 248 3524.12 1092.22
Sector-wise coverage (1997-2011)
(Rs. in Crore)
*As on 31st March 2011
Loan, 73.15%
Equity, 2.55%
Grant, 9.38 %
Venture Funds, 14.92%
Break-up of TDB Investments
Total Investment is Rs 954.64 crores as on March, 2011
ACHIEVEMENTS OF TDBACHIEVEMENTS 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. 1092.22 crore
Leveraged more than Rs. 1200 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 :
SecretaryTechnology Development Board
Department of Science & TechnologyWing-A, Ground Floor, Vishwakarma Bhawan
Shaheed Jeet Singh MargNew Delhi – 110016
E: mail : [email protected] Website: www.tdb.gov.in
TDB look forward for Partnership/Networking
Opportunities to Commercialize Innovations