Godrej Industries Group on Tuesday announced a foray into India’s $ 12 billion private credit space with a launch of a category-II alternative investment fund (AIF). The fund is targeting a corpus of ₹2,000 crore, comprising a base corpus of ₹1,000 crore and a greenshoe option of an additional ₹1,000 crore.
It will be offered through private placement to eligible investors, including high net worth individuals (HNIs), ultra high net worth individuals (UHNIs), family offices and institutional investors.
The fund will pursue a sector-agnostic performing credit strategy focused on established private mid-market companies with demonstrated operating performance and cash flows. Financing will be backed by hard collateral and comprehensive covenant protections, the group said in release.
Manish Shah, non-executive director, Godrej AMC and MD & CEO, Godrej Capital said private credit was a natural extension for the AMC. “Many well-run mid-sized businesses need capital that offers greater flexibility than conventional financing, without requiring them to dilute equity,” Shah said.
He believes there is an opportunity to address that need by combining the Group’s understanding of businesses with disciplined capital.
The fund will do growth financing and finance acquisitions, refinancing and working capital requirements, it said.
The Indian private credit market seen new entrants such as Nuvama, PAG this year and ASK Alternates and Lighthouse Canton launching new private credit funds. Sundaram Alternates early this year raised a Rs 2,500-crore real estate credit fund.
Private credit segment in the country offers returns of 14-22% depending on the type of deals, significantly higher than the compressed spreads available in the US and Europe, making the market increasingly attractive for lenders.