New Delhi: As part of the Silver Jubilee celebrations of the New Delhi based Institute of Objective Studies, (IOS), a two-day International Conference on “Prospects for Islamic Venture Capital Funds in India” will conclude today. The conference began on May 14 at Parliament House Annexe in New Delhi.
The International Conference is being held jointly under the aegis of IOS & Indo-Arab Economic Cooperation Forum. Mr. K. Rahman Khan, Deputy Chairman, Rajya Sabha presided over the inaugural session on May 14 which commenced at 10 am.
The inaugural address was delivered by Mr. D. R. Mehta, former Chairman, SEBI and Dy. Chairman, RBI, Jaipur. Mr. Farid Masood, Director of Advisory Services Department, ICD, Jeddah, KSA, was the guest speaker. Dr. Mohammad Manzoor Alam, Chairman IOS, gave his address on the occasion. Prof. Z.M. Khan, Secretary General IOS, threw light on the Introduction of IOS and its Silver Jubilee year. Dr. Ausaf Ahmad, Finance Secretary IOS, delivered the welcome address while Mr. Ravi Kishore, Secretary General, Indo-Arab Economic Cooperation Forum, New Delhi will propose vote of thanks.
Meanwhile, four panel discussions will be held during the two-day conference. On the first day after the lunch break two sessions of panel discussion will be held while the third panel discussion on the second day morning. The theme of the first panel discussion from 2 pm to 4 pm is “Global Trends in Venture Capital and Private Equity, (VCPE)”. It will be chaired by Prof. R. J. Masilamani, Professor, Institute of Management Studies, Ghaziabad. The panelists shall be Dr. Ashok Haldia, Director, PTC India Ltd., New Delhi; Dr. Ausaf Ahmad, former Head, Special Assignment, IDB, Jeddah, & Finance Secretary, IOS; Prof. Ali Shervani, Director, Miftah Advisor, New Delhi; and Mr. Ravi Kishore, Secretary General, Indo-Arab Economic Cooperation Forum, New Delhi. The second panel discussion from 4.15 pm to 6.15 pm will be on the theme “Venture Capital Funds in Islamic Perspective (I)”. It will be chaired by Dr. Ausaf Ahmad, Former Head, Special Assignment, IDB, Jeddah, & Finance Secretary, IOS. The panelists will be Mr. Farid Masood, Director of Advisory Services Department, ICD, Jeddah, KSA; Dr. Javed A. Khan, Associate Professor, Centre for West Asian Studies, Jamia Millia Islamia, New Delhi; Mr. M. H. Khatkhatay, Founder, TASIS, Mumbai; and Mr. Arshad Ajmal, CEO, Sahulat Microfinance Society, Patna. The third and fourth panel discussion will be held on May 15. The theme of third panel discussion from 9.30 am to 11 am is “Venture Capital Funds in Islamic Perspective (II)”. T shall be chaired by Prof. (Dr.) Vinaysheel Gautam, Founding Director IIM (K;) Prof. & First head, Management Studies IIT (D), New Delhi. The panelists will be Dr. Rudy Yaksick, Partner, Concord Capital Partners LLC, USA; Mr. Imtaiyaz-ur-Rahman, President and Chief Financial Officer, UTI Asset Management Co. Pvt. Ltd., Mumbai; Mr. Nabil El-Alami, Corporate Marketing & Communication Manager, ICD, Jeddah, KSA; and Mr. H. Abdur Raqeeb, Convenor, National Committee on Islamic Banking, Chennai.
While the fourth panel discussion from 11.15 am to 1:00 pm will be on the theme of “Prospects for Islamic Venture Capital Funds in India”. Mr. Imtiayaz-ur-Rahman, President and Chief Financial Officer, UTI Asset Management Co. Pvt. Ltd., Mumbai, will chair the discussion. The panelists areDr. Tahir Beg, Chairman, Institute of Islamic Economics & Development Studies, Bareilly; Dr. Shariq Nisar, Director (Research and Operations), TASIS, Bangalore; Dr. Ahmaruddin, Professor, Dept. of Business Administration, AIET, Lucknow; and Dr. A. Mohammed Ajmal, Wealthcity, Chennai.
The valedictory session from 1 pm to 2 pm will be chaired by Dr. M. Manzoor Alam, Chairman IOS. Mr. G. Ramaswamy, President, Institute of Chartered Accountants of India, (ICAI), New Delhi will deliver valedictory address. Prof. Naushad Ali Azad, former Dean, Faculty of Social Sciences, Jamia Millia Islamia, New Delhi, will read the resolutions passed on the occasion. Dr. Tahir Beg, convener of the conference, will propose vote of thanks.
It may be mentioned here that the opening conference of the Silver Jubilee celebrations of IOS was held here with a three-day international conference on “Towards Knowledge, Development and Peace – Outlining Roadmaps for the Future” from April 15 to April 17 at India Islamic Cultural Centre here in New Delhi. A number of renowned scholars from within the country and abroad besides prominent government officials and ministers of India participated in the conference.
It may be pointed out here that Venture capital is a type of private equity capital typically provided for early-stage, high potential, growth companies in the interest of generating a return through an eventual realization event such as an IPO or trade sale of the company. Venture capital investments are generally made as cash in exchange for shares in the invested company. It is typical for venture capital investors to identify and back companies in high technology industries such as biotechnology and ICT (information and communication technology).
The fast and unhindered growth of economic disparities, regular occurrence of banking and financial crises, and stock market crashes, the world over, testify to the fact that the interest-based paradigm of banking and finance has grossly failed to ensure sustainable and inclusive economic growth. On the other hand the participatory finance paradigm based on profit-loss sharing principle does ensure a justly inclusive economic growth. The Islamic objective of ensuring for every citizen the “right of doing business fairly and fearlessly” is a humanist goal and deserves to be taken up as central thrust in the strategy of inclusive economic development with social justice.
The realm of Islamic venture capital remained ignored by the Islamic Banking sector for quite long, largely because an ‘entrepreneur class and ecology’ which is essential for the development of a healthy venture capital environment was lacking. Most of the Islamic countries could not produce an adequate population of young, bright people with great business ideas and a determination to make a success of ‘their’ business. They also failed in generating a vibrant educational-technological-industrial environment. It is therefore only recently that in some Islamic countries and other countries with sizable Muslim minorities a few Islamic Venture Capital Funds have been founded. As the Middle East economies underwent significant economic-industrial transformation, and a large number of local students with professional education came forward for joining markets and economies of the region, the ecology needed for venture capital funding also developed considerably. Hence a number of VCFs have emerged in recent years in many Arab countries.
Malaysia, in keeping with her role as world leader in Islamic banking and finance has been organising Islamic Venture Capital & Private Equity Conferences regularly since 2008, and has framed comprehensive guidelines for the development of Venture Capital Funding sector. Moreover Ministry of Finance of the government of Malaysia has established Malaysia Venture Capital Management that launched the first Islamic Musharakah Fund attracting participation from local and regional investors.
Musharaka Private Equity Solutions Sdn. Bhd is the nation’s first Islamic venture capital fund. The Government of Malaysia is encouraging Islamic venture Capital firms to establish bases in the country so that it can become a regional hub of IVCFs.
India got its first venture capital fund only in 1997. Since then each year a few new funds were added, then there has been a boom in the VCF sector. By the end of the year 2009, the total number of Private Equity Funds and Venture Capital Funds stood at the staggering figure of 137. Out of this, 69 are located alone in Mumbai. 18 are located in Bangalore and 10 in Hyderabad. Delhi has 9. Kolkata and Ahmadabad each having 7, while Chennai is home to VC funds.
VCPE investments in India witnessed a phenomenal growth both in terms of amount invested from $1.8 billion in 2004 to $22 billion in 2007 before tapering off to $8.1 billion in 2008 as well as the number of deals from 80 in 2004 to 481 in 2007 and then slowing down to 297 in 2008.