Key Facts:
The total revenue in the financial services industry is expected to show an annual growth rate of 14.39%, resulting in a projected market volume of US$37.19m by 2029.
Avendus Capital, a Mumbai-based financial services firm with 25 years of industry experience, has announced the launch of its third private credit fund, aiming to raise up to Rs 4,000 crore (approximately $466 million).
Prime Highlights:
The fund will invest in the debt of mid-sized businesses across India, primarily targeting sectors like pharmaceuticals, manufacturing, chemicals, healthcare, and technology.
The fund is targeting a gross return of 16-18% over its 7-year tenure.
Key Background:
Avendus Capital, a Mumbai-based financial services firm with 25 years of industry experience, has announced the launch of its third private credit fund, aiming to raise up to Rs 4,000 crore (approximately $466 million). This fund is set to focus on investing in the debt of mid-sized businesses across India, which are experiencing heightened demand for capital. The move comes in response to growing investor interest in high-yield debt and the increasing financing needs of mid-market companies, particularly those unable to access traditional bank loans.
The new fund is expected to have a tenure of around seven years and is targeting a gross return of 16-18% for investors. According to Anshul Jain, Executive Director for Avendus Structured Credit Funds, the fund will primarily invest in secured credit transactions with deal sizes ranging between Rs 200 crore and Rs 500 crore. Preference will be given to sectors including pharmaceuticals, manufacturing, chemicals, healthcare, and technology.
This initiative is in line with India’s expanding private credit market, which raised nearly $10 billion in 2024, close to a record high. The country’s ongoing infrastructure push under Prime Minister Narendra Modi has created numerous opportunities for mid-sized businesses, which often face challenges in securing bank financing. As such, private credit funds, offering more flexible and customized solutions, have become an attractive alternative.
Avendus’ first two private credit funds, launched in 2017 and 2022, respectively, yielded returns of 18% and 17% for investors. With the latest offering set to close its first round in the coming month, Avendus remains optimistic about the continued growth of this asset class, which is helping bridge the financing gap between traditional debt and equity. Nilesh Dhedhi, Managing Director at Avendus Finance Pvt., emphasized that private credit is rapidly gaining traction among mid-market enterprises as a crucial source of financing.