FINANCIAL ASSISTANCE for Commercialization of Innovations BY NIRAJ KELA DIRECTOR TECHNOLOGY DEVELOPMENT BOARD DEPARTMENT OF SCIENCE & TECHNOLOGY TECHNOLOGY

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.


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


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.


Health & Medical

Road Transport

Air Transport

Engineering

Chemicals

Energy and Waste Utilization

Information & Communication

Technologies

Agriculture

Partnership with TDB

TDB SUPPORT IS NOT AVAILABLE


• 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


Personal hearing to the applicant

Letter of Intent

YES

Delegation Stage 1


Loan application Upto Rs. 10 crores

( 10 copies)

ISC

YES

NO

3 -4 months

Sub –Committee of the TDB Board



Letter of Intent

YES

Delegation Stage 2

PEC

YES NO


Loan application above Rs. 10 crores

( 10 copies)

ISC

YES

NO

> 4 months

TDB Board



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


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


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


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


Project Evaluation


Project Monitoring


Internal Screening


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



Project Monitoring


Internal Screening

Project Evaluation


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


Project Monitoring


Internal Screening

Project Evaluation



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


Project Completion & Repayment

Internal Screening

Project Evaluation


Project Monitoring


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


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

Documents

FINANCIAL ASSISTANCE for Commercialization of Innovations BY NIRAJ KELA DIRECTOR TECHNOLOGY DEVELOPMENT BOARD DEPARTMENT OF SCIENCE & TECHNOLOGY TECHNOLOGY