July 25, 2001
Source: The Economic Times
Tata picks up -5% stake in Avestha

TATA Industries has picked up a five percent stake in Avestha Gengraine Technologies, a Bangalore-based biotechnology and, bioinformatics company, working on projects like basmati rice genomics. This marks the entry of the Tata Group into the biotech sector. Without disclosing the amount paid by the Tatas for the equity stake, company's founder and CEO, Dr Vill00 Morawalla Patell, said the Tata investment would constitute the first round of funding for the company.

"In biotech, one needs a big company as a partner. Here we have got Tatas and with their backing Avestha Gengraine can catapult into the big league," said Dr Patell. Earlier in the year, the company had got $1.5 million as first round of venture funding from ICICI Venture Funds. The Hyderabad-based Global Trust Bank had also come in as strategic equity investor by contributing RS 2 crore . The funds secured from ICICI Ventures was utilised for sourcing technology, investing in human resources besides being used as working capital. Avestha Gengraine also makes prototype plants for abiotic stress tolerance. This means creating genetically modified plants which could be drought-tolerant," salinity-tolerant, which have vitamins or better food value and other quality environmental traits at the end of three years of work.

The company has made a library of basmati genes, which is the first step in genomics. Incidentally, the world is concentrating on de-coding the japonica version of the rice sequence. According to Dr Patell the revenue model of the company is through contract research in the field of life sciences especially in proteome based analysis and it plans to break even by April 2002.