Tuesday, March 29 2005 10:37 Hrs (IST) - World Time -

Mumbai: India is to witness an increase in Venture Capital (VC) funding activities from the Silicon Valley as VCs are increasingly looking at India as an investment base.

"India is being looked up as an investment base and a hub for Research and Developmental (R&D) activities, especially in pharmaceuticals and biotechnology," Mobius Venture Capital Principal Rajeev Batra said in Mumbai yesterday (Mar 28, 2005).

In the next two to five years, global VCs are slated to invest around $ 1-5 billion in companies, which are into software, components, semi-conductors, wireless and Intellectual Property- (IP) based products, he said.

However, the amount of investment into the country would depend on a number of factors ranging from the potential and viability of the business proposals and the credibility of the promoters, he said.

An investment in incubating companies would still be on a wane, as it requires the VCs to work alongside companies to produce the desired result.

Navin Chaddha of Gabriel Venture Partners said a lack of local representation is hampering VC investments in India as most of the risk financing entities prefer to do business after setting up a local presence.

"Most of the companies are looking for a business partner as they would not like to travel across the globe (from US or UK) to look after the investment in India," he said.

An increase in activity is expected to be witnessed in IT product and services, he said.