Narayana Murthy sells Rs172 crore Infosys stock to turn ‘angel’

N R Narayana Murthy, co-founder and chief mentor of India's second largest software services provider Infosys Technologies, has sold company shares worth Rs172 crore ($37 million) to set up a venture capital fund, the company said on Thursday. Murthy sold a total of 800,000 shares on Wednesday and Thursday, Infosys said in a filing to the stock exchanges.

After the transaction, Murthy holds 2.38 million shares in Infosys, which he co-founded with five other software engineers in 1981 with $250, mainly borrowed from their spouses, and turned it into a technology bellwether.

Murthy, an icon for India's emerging middle class professionals, has informed Infosys that the proceeds of the sale would be used as seed capital for a venture capital fund which he plans to set up in India.

In keeping with his track record of social awareness, the VC will encourage young entrepreneurs with ''brilliant ideas''. It will invest in startups operating in the areas of basic healthcare, education and nutrition. ''The fund will primarily invest in India and may on a case-to-case basis consider investing overseas,'' the communique said.

The Murthy family's combined holding in Infosys is around 5 per cent, with his wife Sudha owning the largest chunk. Murthy's individual holding in Infosys, which has been less than 1 per cent for a while now, stands reduced to 0.4 per cent.

Murthy later told CNBC-TV18 that the VC would be called Catamaran Investments Pvt Ltd. ''(The VC) will look at opportunities offered by entrepreneurs in a wide variety of fields, a broad spectrum of fields. I don't want to limit it to one field like hi-tech or retail or any of those. In India if you limit yourself to one area, then the number of opportunities is not as high as elsewhere. Hopefully in the next few months, I will be able to put this into action.''

Elaborating on his plans, Murthy said, ''I would like in the first year or two to go with indicative investments - look at people who are much more experienced than I am and then perhaps go along with them. We would like to first go in with early stage investments, perhaps with angel money, angel investments, and theme investments.''

On the possibility of further fund raising, Murthy said, ''Possibly yes. I have been thinking about it, but certainly at the appropriate time, I would raise some more money.''