HDFC Asset Management Company (HDFC AMC) has entered the private credit segment with the launch of a ₹2,500-crore structured credit fund, expanding its footprint beyond traditional mutual fund products into alternative investments.
The new vehicle, Structured Credit Fund-I, has an initial fundraising target of ₹1,500 crore, along with a green-shoe option of ₹1,000 crore. At its first close, the fund has raised around ₹1,290 crore from a mix of institutional investors, family offices and ultra-high-net-worth individuals. HDFC AMC will also commit capital to the fund, investing up to 14 per cent of the total corpus as sponsor contribution.
The International Finance Corporation (IFC), the private sector arm of the World Bank Group, has joined as the anchor investor with a commitment of up to ₹220 crore. IFC’s participation is expected to enhance investor confidence and underline the growing institutional interest in India’s private credit market.
The fund will focus on providing structured and secured debt to mid-market companies across multiple sectors. These firms often face challenges in accessing bank credit due to stricter lending norms and risk controls. By offering customised debt solutions, the fund aims to address funding gaps while maintaining a focus on capital protection.
HDFC AMC has said the fund will invest in businesses with predictable cash flows and strong fundamentals. It will not take exposure to real estate. The investment strategy is designed to deliver returns of about 14–17 per cent annually over a four-to-six-year period. Around ₹380 crore has already been deployed across three transactions in different sectors.
The launch comes amid rising interest in private credit as an asset class in India. With banks becoming more selective in lending and companies increasingly looking for flexible financing options, private credit funds are gaining traction as an alternative source of capital.
For asset managers, the shift towards alternatives also offers an opportunity to diversify revenue streams and cater to sophisticated investors seeking higher risk-adjusted returns. HDFC AMC indicated that Structured Credit Fund-I is part of a broader strategy to build a presence in the alternatives space, and more such offerings could be considered in the future as demand grows.
Industry experts expect India’s private credit market to expand steadily in the coming years, driven by structural changes in lending and increased participation from domestic and global investors.
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