Knowledge-Manufacturing Company, a Mauritius-based firm, on Friday received the government nod to invest 135 million dollars (Rs 650 crore) into venture capital fund Forum Synergies India Trust.
The VC fund will invest in buying equity of small and medium manufacturing companies.
"The Cabinet Committee on Economic Affairs gave its approval to the proposal of Forum Synergies (India) PE Fund Managers P Ltd to accept contribution up to a limit of 135 million dollars from India Knowlege-Manufacturing Company under FDI route," an official statement here said.
This would result in Foreign Direct Investment (FDI) of around Rs 650 crore into the country, the statement added. The Mauritius-based Knowledge-Manufacturing Company will in turn get units in the trust.
Forum Synergies India Trust is being managed by Bangalore-based private equity firm, Forum Synergies (India) PE Fund Managers. MD&CEO of the Bangalore-based equity firm Samir Inamdar said the trust will invest in equity of small and medium companies.
Investors across the globe will invest in Knowledge-Manufacturing Company, which will then invest into the trust, which has venture capital fund registration with SEBI, he said.
Earlier, the Department of Revenue had raised some objections to the proposal, saying it may involve an alleged "treaty shopping", sources said.