NS Emerging India Credit Opportunities Fund My target is to raise up to Rs 1,000 crore.
The fund will generally target senior, secured debt investments in India-focused mid-market businesses with expertise in niche areas.
“Private debt as an asset class is comparatively still at an early stage of development in India and is expected to witness significant growth in the coming years, similar to the growth and similar growth of the asset class seen in other markets,” said Piyush Gupta, Head of Private Credit, Investec.
The fund has just raised more than half of the target fund. It raised Rs 530 crore from over 200 family offices and wealthy investors. The fund is expecting to complete its second tranche soon.
“Demand for non-standard, flexible loan solutions that traditional credit providers are unable to meet remains strong on the back of continued activity in M&A, stake consolidation and bridge financing,” Gupta said.
The main focus will be on companies with strong operational history, promoter pedigree and corporate governance track record. The fund will have a tenure of four and a half years and will provide private credit solutions for various end uses including acquisition financing, stake purchase, bridge financing, refinancing, development capex, etc. The fund will be sector agnostic, except in the real estate space.
The private credit market in India has assumed significant relevance after the credit crisis of 2018. Many wholesale NBFCs had to withdraw from the mid-market private lending space.
To be sure, with all the influx of liquidity and rate cuts recently, large caps are enjoying substantial spread compression and ample liquidity. However, a significant demand/supply gap persists in the mid-market private credit space.