Private Credit: An unmissable opportunity in India
In a nutshell
Corporates need alternative capital channels to meet their growing financing requirements and development of a vibrant and inclusive bond market remains crucial.
Private Credit is a large market, both globally as well as in India. Internationally, this market has tripled over the last decade and continues to exhibit promise. Investments in private credit opportunities yield significantly higher returns, typically ranging between 10%-15% as compared to FDs and Debt MFs that offer 6%-8% return. The best vintage for private credit is in real estate where there is a huge credit demand but limited fund availability. The underlying for most private credit opportunities is a combination of cash flows plus security over assets.
Our founder, Ashish Khandelia, recently participated in a panel discussion organised by PMS AIF World alongside Karthik Athreya – Head, Product & Strategy, Sundaram Alternates and Hemant Daga – Co-founder & CEO, Neo Asset Management to discuss expansion in Indian private capex and an opportunity that awaits the private credit funds. Here is the hyperlink where you can listen to the entire conversation here. Also, a note authored by us on this subject matter was carried by their quarterly newsletter Investonomics (Special Edition | Jan 2023). You can access the same here
As a context, this space significantly grew globally post the GFC and we see the same trend spanning out in India post the IL&FS debacle.