As first reported by DealStreetAsia, HDFC Capital Advisors, a unit of India’s largest private sector lender HDFC Bank, is looking to raise up to $2 billion for a new private credit fund, according to people familiar with the matter.
The fund, which is still in the early stages of planning, would target mid-market companies in India, the people said. HDFC Capital Advisors is seeking to raise the money from a mix of institutional investors, including foreign pension funds and insurance companies, the people said.
The move comes as India’s private credit market is growing rapidly. The market is expected to reach $100 billion by 2025, up from $25 billion in 2020, according to a report by EY.
Image Credit: HDFC
HDFC Capital Advisors is well-positioned to tap into this growth. The firm has a strong track record in the private equity and debt markets, and it has a deep understanding of the Indian corporate landscape.
The new fund would be the latest in a series of private credit funds that have been raised in India in recent years. In 2022, Piramal Capital and Housing Finance raised $1.5 billion for a new private credit fund, and Brookfield Asset Management raised $1 billion for a similar fund.
The growth of the private credit market is being driven by a number of factors, including the increasing demand for debt capital from mid-market companies, the rise of alternative investment strategies, and the availability of cheap debt.
The new fund from HDFC Capital Advisors is likely to be well-received by investors, given the firm’s strong track record and the growth potential of the Indian private credit market.
