The close-ended international venture capital fund would be dedicated to investing in companies which have already utilised the bank's state and national venture funds. The bank, however, is yet to decide about the launch platform and date.

Hitherto, Sidbi offered primarily seed capital to start-up companies through its associates in several states. The new project would be a landmark and it would help the existing medium and small scale industries to heave a sigh of relief.

``With the launch of the international fund, Sidbi will have a three-tier structure - state, national and international venture capital funds,'' a top official in Karnataka Information Technology Venture Capital Fund (KITVEN Fund) said.

Incidentally, inKITVEN Fund, which aims to make available long-term funds to new and unlisted companies in the start-up stages, Sidbi has a 50 per cent equity holding, while others being Karnataka State Industrial Investment and Development Corporation Ltd (KSIIDC) and Karnataka State Financial Corporation (KSFC) with equal partnership.

KITVEN Fund chief executive officer M Rudradev told The Financial Express that Sidbi was also planning to pick up a substantial stake in the state's Rs 20 crore biotech venture capital fund. ``We had an internal meeting with SIDBI managing director Shailendra Narayanan on April 20 in Lucknow to this effect,'' he added.

The proposed biotech venture fund would be region-based and it would be unveiled in four regions. South region would be covered by Karnataka, taking the lead in its biotech industries. The southern region would comprise all four southern states including Tamil Nadu, Kerala, Andhra Pradesh and Karnataka.

The Karnataka government is also planning to initiate talkswith leading banks and financial institutions to finance the forthcoming venture capital funds of the company. ``Discussions will also be held with private offshore funds. The idea behind the strategy is that the offshore venture capital funds can place finance with us,'' he added.

Meanwhile, KITVEN, the Rs 15 crore, close-ended venture capital fund is likely to be closed within 8-10 months. ``We have already shortlisted 27 projects and a decision is expected soon to this end. The fund would undertake investment in the range of Rs 25 lakh to Rs 150 lakh per investee company. The preferred form of investment in equity.

KITVEN is managed by Karnataka Asset Management Company Pvt Ltd, a firm promoted by KSIIDC and KSFC. Depending upon the response and availability of attractive investment opportunities, the size of the fund would be enhanced at a later date.