Singapore-based wealth and asset management firm Lighthouse Canton is looking to grow its Indian private credit and hybrid debt businesses five times in the next five-seven years. Currently, these segments contribute $400 million to the business.
The plan is part of firm’s strategy to double its global assets under management to $10 billion by 2027.
Pranob Gupta, managing director, business head – India alternatives (credit & hybrid strategies), the plan rests on three things – (i) building strategies focused on high-growth sectors where the credit opportunity is structural, and not cyclical; (ii) continued investment in on-ground origination; and (iii) its cross-border presence across Singapore, GIFT City, West Asia and other locations allows the firm to efficiently accumulate domestic and global capital pools.
Mid-Market Deficit
According to Gupta, a growing pool of mid-market opportunities exist in hybrid debt space, where vanilla debt is not the right fit and the promoter doesn’t want to dilute at current valuations. “That’s where credit with an equity-linked upside, through instruments like CCDs (compulsory convertible debentures) and OCDs (optionally convertible debentures ) become cleaner solutions.”
Within the credit platform, the company is building the capability to underwrite more of special-situation and structured transactions, where the cash flow is anchored in the operating business, but the return profile picks up additional upside through the convertible component, he said.
Lighthouse Canton recently launched a Rs 1,200-crore private credit fund in India for structured credit deals. The fund manager is hoping to do the first close in the third quarter of 2026.
“There’s a clear funding gap, as more than 100,000 mid-market enterprises do not often get bank support in structured, acquisition, and special-situations lending, and that is our target space,” said Gupta.
Macro Headwinds
Gupta said if the West Asia conflict is prolonged, there could be substantial change in spread. But if a resolution is reached in next one or two quarters, then borrowers could wait to raise private debt.
Gupta said refinancing is likely to be among the leading drivers of near-term deal flow. Recent precedents like the Shapoorji Pallonji, PharmEasy, and GMR Group refinancings give it a sense of where the mid-to-large-ticket demand exists. Besides, promoter financing for stake acquisitions and consolidations is clearly picking up, he said.
“Sponsors are increasingly using private credit to consolidate ownership, rather than diluting at current market levels. Volumes around deals centered towards funding equity contribution for fresh capex will take some time to come back in line with the macro cycle,” Gupta said.