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.
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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.
