Exhilway Private Capital Market will invest US $5 billion in India but will avoid direct registration with the regulators. The fund will operate out of USA and will invest in India via FDI.
Exhilway Private Capital Market (EPCM), India's first secondary market for the unlisted companies has diluted its 1% equity to raise US $ 11 million or INR 66 crore for its expansion in India. The deal valued EPCM at US $1.1 billion or INR 6,600 crore. The equity stake is sold to a clutch of high net worth investors from the United Arab Emirates (UAE) who last month expressed interest to invest in the India's innovative trading platform. The investors will pay INR 10 crore upfront and balance as called for expansion by the company.
EPCM recently faced some regulatory hurdles in India to raise India's first and exclusive SME private equity (PE) fund but had put all legal issues to rest after it decided quit India and take its PE fund to the British Virgin Islands and invest in the companies via foreign direct investment (FDI). EPCM will manage money from India, however the fund will be operational in USA.
"Raising funds and sustaining operations in India for a PE is a difficult task. Alternative Investment Fund guidelines recently issued by SEBI has lot of loopholes and neither we find direct support from the regulators. The foreign investors are already losing interest in India and in absence of support we decided to quit India, however we are bullish on India and will continue to invest via FDI instead of participating in the complicated direct registrations with the regulators," said Ajay Garg, CEO of EPCM.
The company which saw bureaucracy a big problem in India has found peace operating out of US & UK. The company will begin to raise close to US $1 billion or INR 6,000 crore in USA by July end this year and will divert money into the India based SME's.
The officials of EPCM will meet Finance Minister early next week to present their business plan which will bring investments of US $5 billion or INR 30,000 crore in India by the end 2015.
EPCM plans to hire over 200 people in India and plans to emerge as India's largest PE fund.