Sima has mooted the idea of a Textile Equity Fund (TEF) for its members. Preliminary discussions have been held with a consulting firm to rope in some well known names in venture capital industry.

M Ramaswamy and Vijay Venkataswamy, chairman and vice-chairman respectively of the association, claimed on Tuesday at least 40-50 member mills of the association who are struggling for want of funds will be benefited by TEF. However, Sima's role will be limited to only that of a facilitator and not that of a guarantor.

Sima will send out a detailed questionaire, as suggested by the consultant, in the coming days to all its members and the assessment excercise is likely to take a month's time. According to the association, some overseas fund managers are being contacted.

The enviable performance of the spinning industry in the world markets, cornering a 25 per cent share in the global yarn market, is believed to have instilled confidence in the venture capitalists. ``There are many members who have a technically viable unit but perform badly for want of funds. Our effort will be to bail them out. We have proved as quality yarn producers in the export markets, M Ramaswamy said dismissing fears of rejuvenating the now idle excess capacity in the industry. The industry itself has cited excess capacity as a reason for the recession.

According to Sima spokesperson PR Subramanian, the fund could be used to bridge the gap in the promoter's contribution required under the Technology Upgradation Fund (TUF) scheme, for working capital requirements of the unit or even for technology upgradation and modernisation. All the three purposes for which the fund is being mooted are considered crucial by the industry watchers.

The stringent norms of the TUF resulted in cash-starved mills staying away from upgradation. Moreover, the government announced scheme does not fund stand-alone spinning mills modernisation. The banks too have been wary of extending working capital to the industry.

Some textile machinery manufacturers have evinced interest in joining the funding programme. According to Sima office-bearers, the funds could be arranged at competitive interest rates and the funding could be by way of preference capital. However, no corpus is being thought of at present.