In a significant move to tap into India's burgeoning private credit space, HDFC Asset Management Company (HDFC AMC) has officially launched its maiden Structured Credit Fund-I. The fund aims to provide crucial alternative debt financing to mid-market companies, a segment often underserved by traditional lenders.
IFC Backs Fund as Anchor Investor with Major Commitment
The International Finance Corporation (IFC), the private sector arm of the World Bank Group, has thrown its weight behind the new venture. As announced by HDFC AMC in a statement on Monday, IFC will invest up to ₹220 crore as an anchor investor in the Structured Credit Fund-I. This endorsement from a global development institution underscores the fund's potential and strategy.
The fund has already achieved a strong initial response, securing commitments of approximately ₹1,290 crore in its first close. It is targeting a final corpus of ₹1,500 crore, with a green-shoe option to raise an additional ₹1,000 crore if investor demand is high. Notably, HDFC AMC itself, as the sponsor, has committed up to 14% of the total fund corpus.
Focus on Mid-Market Companies and Targeted Returns
The core mandate of the HDFC AMC Structured Credit Fund is to channel capital into India's dynamic mid-market companies. The fund has hit the ground running, having already committed ₹380 crore across three deals in various sectors.
This strategic focus aims to bridge a critical financing gap. The fund will provide structured debt solutions where conventional bank loans might be limited due to sectoral constraints, complex business models, or growth-stage requirements. HDFC AMC believes this approach will not only offer companies vital capital but also support job creation and fuel product and market innovation.
From an investor perspective, the fund is targeting mid-teen returns over an investment horizon of 4 to 6 years.
Boosting India's Private Credit Ecosystem
The entry of a major asset manager like HDFC AMC into the private credit arena is seen as a milestone for the Indian financial landscape. The company stated that the fund will play a pivotal role in strengthening India's private credit ecosystem.
By providing a scalable and institutional source of capital, the fund is expected to support the expansion of private credit as a viable asset class for mid-market companies seeking growth capital. This move aligns with the broader trend of specialized, non-banking financial solutions gaining prominence in India's evolving economy.
