The Rs 15-crore HITVEL, a state government-sponsored venture capital fund for software companies, has been set up through a joint venture between SIDBI, the AP Infrastructure Corporation (APIIC) and the APIDC. It has been in the making for almost two years now and will be operational by the end of December, R Chandrasekhar, state IT secretary, said on Thursday.

"This will enable internet start-ups and other software companies to reduce the much-needed capital expenditure for setting up business," he said.With Hyderabad reaching a critical mass in the IT sector and with 92 per cent of the space at the HiTec City itself being either booked or blocked, the company has decided to expedite work on the second phase of the Rs 1,500-crore project, he said.

Chief Minister NChandrababu Naidu's pet project, the HiTec City was set up through a joint venture company, Infocity Ltd., between the L&T which holds 89 per cent equity, and the APIIC taking the remaining 11 per cent stake. The company was also looking at the possibility of expanding the equity base of the Infocity Ltd, to see the remaining phases of the project through.

"The thinking is towards inducting a new investment partner from the financial sector while the Hudco has shown interest in funding the project", Chandrasekhar said.