Atmanirbhar Bharat needs atmanirbhar capital

Sanjay Nayar, president of Assocham and founder of venture-capital (VC) firm Sorin Investments, tells Deepsekhar Choudhury and Tarunya Sanjay that while India has seen an explosion of early-stage VC firms, the country continues to lack a deep pool of domestic capital. Edited excerpts

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After a career in private equity, what led you to start your own VC firm?

Having seen firsthand how fragile businesses could become without discipline, I felt a responsibility to put my learning into practice. The idea wasn't just to create a fund, but to build a proper institution; one that placed governance, transparency and rigorous board engagement at the very core.

The idea was to build an institution. Now we have ₹1,400 crore of capital. We are backed by KKR partners, by my family, by the [Harindarpal Singh] Banga family, HNIs [high-networth individuals] and Sidbi [Small Industries Development Bank of India]. So, we have a good, institutionalised pool of capital and 22 investors.

We want to be able to work with the founders who need and appreciate the help we're able to give them. This is a very initial phase of value-added PEs and VCs being born in India. This local industry is still in the first phase. GPs [general partners] like Avana Capital, Fireside Ventures, Blume and Fundamentum have come up over the last decade.

How is having a big domestic PE/VC industry significant to India's economic ambitions?

When you have foreign PEs/VCs, they're subject to a high degree of volatility. There could be sovereign risk, currency risk, political risk and geopolitical risk. That's why it behoves every country to develop a local pool of private capital that won't fly away in the face of volatility.