July 26, 2024
EvolutionX Debt Capital shares views on the fund’s focus areas for investments in tech and tech-enabled businesses across Asia
Bloomberg
Temasek-Backed EvolutionX Shifts Fund Focus to India From China
- The firm aims to deploy up to 70% of its credit fund in India
- China’s economic woes prompt the firm to beef up India share
By Saikat Das
EvolutionX Debt Capital Pte., a joint venture between Temasek Holdings Pte. and DBS Bank, is shifting its investment focus to India from China, aiming to capture a bigger share of the South Asian nation’s expanding private credit market.
The Singapore-based debt financing platform plans to allocate as much as 70% of its $500 million private credit fund to India, Rahul Shah, a partner at the company said in an interview. The firm is targeting high double-digit returns with an investment horizon of three to four years, he said.
“India’s deployment share of our tech-focused growth debt fund will continue to rise as macro concerns in China prompt us to do so,” he said. “The scene could change later once China concerns ebb.”
Private credit is gaining traction in India despite global warnings about risks in the direct lending market, which has seen explosive growth. While India’s world-beating economic growth is drawing investors, China is grappling with a sluggish economy.
EvolutionX launched the fund in 2021 with an aim to invest in tech and tech-enabled companies in India, China and Southeast Asia. It had initially planned to allot 40% of the assets in India and an equal proportion in China. The fund has invested about $300 million through seven companies and several of these are from India.
The company is planning a second fund as the investment limit for the first will get exhausted over the next two years, Shah said. It is also looking at new modes for funding, including companies’ tax-related payouts, buyback of employee stock options, and mergers and acquisitions, he said.