New Delhi, July 14 -- Fullerton Carbon Action Fund, a private equity vehicle managed by Singapore-based Fullerton Fund Management that seeks to back mid-market companies pursuing decarbonisation strategies, has made its second investment in India.
The fund, which raised $100 million in its anchor close in 2024 after securing commitments from Temasek-owned asset management group Seviora and Singaporean insurer Income Insurance Ltd, has made a growth-stage investment in Indian recycled textile producer Usha Yarns Ltd.
Usha Yarns said in a statement it will use the capital to scale up its recycled yarn production capacity, strengthen the traceability of its raw material sourcing, and expand its supply to apparel and textile brands across international markets.
While the company didn't disclose financial details of the transaction in its statement, VCCircle has gathered that it secured around Rs 135 crore ($14 million).
Founded in 1995, Usha Yarns operates recycling and manufacturing facilities near Chandigarh, converting post-industrial cotton and recycled PET into pre-coloured yarns sold under its "Puneh" brand. The pre-colouring process, done at the recycling stage, helps customers reduce downstream dyeing costs.
"Fullerton understood our business from the first conversation - not just the financials, but what it actually takes to produce recycled yarn at consistent quality and scale," said Anurag Gupta, managing director of Usha Yarns.
The funding comes as global apparel brands move from voluntary sustainability pledges toward binding circularity and traceability requirements, creating demand for verified recycled materials.
"Mechanical cotton recycling at consistent, brand-grade quality is one of the hardest things to do in textiles, and Usha Yarns is among the very few that have demonstrated it at scale," said Akhil Jain, partner at the Fullerton Carbon Action Fund. Jain said demand for recycled materials is likely to outpace supply as brands shift from pledges to binding requirements, and that the fund's role is to help Usha Yarns scale to meet that demand.
Fullerton Fund Management is part of Seviora, the multi-asset management group set up by Singapore state investment firm Temasek. The Fullerton Carbon Action Fund targets established mid-market companies across India and Southeast Asia executing decarbonisation strategies.
The fund made its first investment, both in India and overall, last year when it picked up a stake in Routematic, a corporate transport-as-a-service company. The investment was part of Routematic's Series C funding round of $40 million.
Earlier this year, the fund invested in Pyro Energie, Thailand's leading recycler of end-of-life tires. This was the fund's second deployment and its first in Southeast Asia. Usha Yarns is the fund's second investment in India and third overall that it has disclosed so far.
The fund focuses on Southeast Asia, India and China. It aims to invest in market-leading businesses in the manufacturing, industrials, energy, and electric vehicles/mobility sectors. It seeks established, profitable and robust cash flow businesses, and avoids earlier-stage venture capital investments as well as infrastructure-related deals.
Published by HT Digital Content Services with permission from VC Circle.