Infosys Technologies co-founder and chairman N.R. Narayana Murthy has sold company shares worth $37 million to set up a venture capital fund, the company said on Thursday.

Murthy, the chief mentor of India's second largest software services exporter, 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 six 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, 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.

"The venture capital fund will encourage and support young entrepreneurs having brilliant business ideas," said the filing. "The fund will primarily invest in India and may on a case-to-case basis consider investing overseas."