Commercialization of Innovations 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

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

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.

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 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.

TDB functions as defined in the Act:- 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

Technology Development Stages & TDB Idea Generation TDB Non TDB Theoretical Modeling 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

Seven Steps to (near) Perfection

Support to Venture Capital Funds Technologies of National Importance TDB Funding Channels 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 Business Incubators at Centre of Technology / Academic Excellence For financing start ups. To consortium of Industry, Labs and Contract Research organization Integrated programmes for development and commercialization of technologies Soon: US Aid Corpus of Rs 200 crores for social innovations

TDB FUNDING CRITERIA Prototype Development should be completed Soft Finance to Innovating Companies TDB FUNDING CRITERIA 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.

Terms & Conditions of TDB Funding Soft Finance to Innovating Companies 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 Soft Finance to Innovating Companies Terms & Conditions of TDB Funding 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

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

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

TDB SUPPORT IS NOT AVAILABLE Soft Finance to Innovating Companies 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 Soft Finance to Innovating Companies TDB PROJECT APPRAISAL & FUNDING MODEL Delegation Stage 1 Loan application Upto Rs. 2.5 crores ( 10 copies) 2 months ISC Personal hearing to the applicant NO YES Chairperson YES Letter of Intent

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

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

Soft Finance to Innovating Companies Cost of the Project Heads of expenditure Total 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 Expenditure Incurred till the date of application Expenditure to be incurred 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 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

Means of Finance Soft Finance to Innovating Companies 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

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

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 Internal Screening Project Evaluation Signing Loan Agreement Project Monitoring Project completion & Repayment

Signing of Loan Agreement 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 Internal Screening Project Evaluation Signing Loan Agreement Project Monitoring Project completion & Repayment

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

Project Completion & Repayment 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 Internal Screening Project Evaluation Signing Loan Agreement Project Monitoring Project Completion & Repayment

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

Policy 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.

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

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………..

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

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

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) Ventureast TeNet Fund II (Rs. 15 crores) GVFL Venture Capital (Rs. 15 crores) 6. RVCF Venture Capital (Rs. 15 crores) TOTAL:- Rs.175 crores

Sanctioned by the Board Sector-wise coverage (1997-2011) (Rs. in Crore) 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 35.51 9.75 4 Chemical 19 154.44 50.98 5 Agriculture 125.18 40.52 6 Energy & Waste utilization 8 132.36 55.98 7 Tele- communication 11 90.04 33.85 Defence and Civil Aviation 2.20 9 Road Transport 10 527.04 81.20 Air Transport 142.1 67.80 Information Technology 32 274.98 112.01 12 Others 31 682.83 199.50 Total 248 3524.12 1092.22 *As on 31st March 2011

Total Investment is Rs 954.64 crores as on March, 2011 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

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

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.

Commercialize Innovations INVITATION ….. TDB look forward for Partnership/Networking Opportunities to Commercialize Innovations 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