FINANCIAL ASSISTANCE for Commercialization of Innovations BY NIRAJ KELA DIRECTOR

1. FINANCIAL ASSISTANCE for Commercialization of Innovations BY NIRAJ KELA DIRECTOR TECHNOLOGY DEVELOPMENT BOARD DEPARTMENT OF SCIENCE & TECHNOLOGY TECHNOLOGY BHAVAN, NEW MEHRAULI ROAD NEW DELHI – 110016 www.tdbindia.org

2. MINISTRY OF SCIENCE AND TECHNOLOGY Department of Science & Technology Department of Scientific & Industrial Research Department of Biotechnology R&D Labs TDB TIFAC R&D Labs CSIR CEL NRDC Website: DST: www.dst.nic.in DSIR: www.dsir.nic.in DBT: www.dbt.nic.in • 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 For COMMERCIALIZATION OF TECHNOLOGY

3. 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. TECHNOLOGY DEVELOPMENT BOARD

4. Pro-Active roles • 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 technologiesthat 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.

5. Technology Development Board, would- • 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 TDB functions as defined in the Act:-

6. Idea Generation TDB Non TDB Theoretical Modeling Technology Development Stages & TDB Product or service TDB operates in the niche segment of technology innovations / development & commercialization and not technology application Concept Development and Prototyping Business Analysis Beta Testing and Market Testing Technical Implementation Commercialization

7. Seven Steps to (near) Perfection

8. TDB Funding Channels Integrated programmes for development and commercialization of technologies Soon: US Aid Corpus of Rs 200 crores for social innovations

9. Soft Finance to Innovating Companies Prototype Development should be completed • Who can be funded ? • Commercial enterprises, startup companies (excluding sole entrepreneur/ proprietorship concern) • Source of Technology • National Laboratories • In-house R&D unit of a company • recognized by DSIR • Individuals holding IPRs • 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. TDB FUNDING CRITERIA

10. Soft Finance to Innovating Companies • 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

11. Soft Finance to Innovating Companies • Term/ project Loan to commercial entities • Royalty @ 0.5 % for the duration of re-payment. • Implementation within 3 years • Customs duty exemption on import of R&D equipments • Soft Collaterals • Repayment in six monthly nine installments • No prepayment / commitment / processing charges. • Equity in public entities upto 25% of project cost • Grants-in aid to projects of national interest Terms & Conditions of TDB Funding

12. Soft Finance to Innovating Companies • 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. What can be funded: Development and commercialisation of

13. Partnership with TDB • Health & Medical • Road Transport • Air Transport • Engineering • Chemicals • Energy and Waste Utilization • Information & Communication Technologies • Agriculture

14. 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 SUPPORT IS NOT AVAILABLE

15. Soft Finance to Innovating Companies Delegation Stage 1 Loan application Upto Rs. 2.5 crores ( 10 copies) 2 months Personal hearing to the applicant ISC TDB PROJECT APPRAISAL & FUNDING MODEL NO YES Chairperson YES Letter of Intent

16. Soft Finance to Innovating Companies Delegation Stage 2 Loan application Upto Rs. 10 crores ( 10 copies) Personal hearing to the applicant ISC NO YES TDB PROJECT APPRAISAL & FUNDING MODEL 3 -4 months PEC NO YES Sub –Committee of the TDB Board YES Letter of Intent

17. Soft Finance to Innovating Companies Delegation Stage 3 Loan application above Rs. 10 crores ( 10 copies) Personal hearing to the applicant ISC NO YES PEC TDB PROJECT APPRAISAL & FUNDING MODEL > 4 months NO Financial Due Diligence YES NO TDB Board YES Letter of Intent

18. Soft Finance to Innovating Companies Heads of expenditure Total Expenditure Incurred till the date of application Expenditure to be incurred • 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 Land Site Development Building / Civil Works (i)Factory (ii)Administration Cost of the Project (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 • 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 Others (specify) Interest during Construction Contingency Margin Money for working capital Total

19. Soft Finance to Innovating Companies Status on date Additional Amount Proposed Total • Equity • Promoters • Others (specify) Means of Finance • Loan • Financial Institution • Bank • Others (specify) • Assistance from • TDB Loan or Equity (specify) Total

20. Soft Finance to Innovating Companies Submission of application Internal Screening Project Evaluation Signing Loan Agreement Project Monitoring Project completion & Repayment 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

21. Soft Finance to Innovating Companies 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

22. Soft Finance to Innovating Companies Submission of application Internal Screening Project Evaluation Signing Loan Agreement Project Monitoring Project completion & Repayment 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

23. Soft Finance to Innovating Companies Submission of application Internal Screening Project Evaluation Signing Loan Agreement Project Monitoring Project completion & Repayment 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

24. Soft Finance to Innovating Companies Submission of application Internal Screening Project Evaluation Signing Loan Agreement Project Monitoring Project Completion & Repayment 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

25. 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

26. Seed Capital Scheme Policy • 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,

27. Seed Capital Scheme Policy • 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.

28. Proposals 2 months Personal hearing to the applicant Committee of Independent Experts Procedures TDB Chairperson YES Letter of Intent

29. 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. Before applying…………….

30. 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………..

31. Support for start-ups in incubators • 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

32. Support for start-ups in incubators(5th round) • 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

33. Joint Financing • TDB has participated in venture capital investments with: • 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) • 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) • UTI –ITVUS Fund (Rs. 25 crores) • VentureastTeNet Fund II (Rs. 15 crores) • GVFL Venture Capital (Rs. 15 crores) • 6. RVCF Venture Capital (Rs. 15 crores) TOTAL:- Rs.175 crores

34. Sector-wise coverage (1997-2011) (Rs. in Crore) *As on 31st March 2011

35. Break-up of TDB Investments Venture Funds, 14.92% Grant, 9.38 % Loan, 73.15% Equity, 2.55% Total Investment is Rs 954.64 crores as on March, 2011

36. 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. 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

37. 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.

38. 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.

39. TDB look forward for Partnership/Networking Opportunities to Commercialize Innovations 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 – 110016 E: mail : hk.mittal@nic.in Website: www.tdb.gov.in