Exhilway Global, a US hedge fund turned private equity firm, is set to invest $20 million in Champion Agro Fresh, the fruit and vegetable production arm of India’s multi-faceted food and agri business Champion Agro.
The funding came from Exhilway Global’s first private equity fund – Exhilway Global Opportunities Fund I – which closed on $200 million in May and represents the growing appeal of India’s private equity market, according to Rahul Kumar, head of Exhilway India.
“The Indian private equity market is regaining the bullish look it had back in 2005/2006, before China and Brazil became more active in the market,” Kumar, told Agri Investor.
“Under the old Congress government, there was no risk capital flowing into India, and the private equity sector was not being engaged in the financing of India’s businesses,” he said.
Corruption within the old government put private investors off partnering on public projects, but this is changing under Narendra Modi’s leadership, added Kumar.
“The government is now focusing on the commercial development of India and we’re keen to invest in sectors which are receiving government support.” He also noted that banks in India were not lending at the levels necessary to develop Indian business, and government allocations are small, when considering the level of financing required.
Discussions between Champion and Exhilway are still in the final stages despite the investment firm spending 11 months conducting due diligence on Champion Agro.
Exhilway Global invests in advanced companies which have proven profitability, or at least have a viable business model.
Exhilway’s investor base is predominantly made up of US high net worth individuals although the firm is in talks with some US pension funds about future funds and will look to attract European demand too, according to Kumar.
The firm started raising capital for Fund II, which is targeting $800 million, in February.