HDFC AMC forays into private credit, taps IFC for maiden fund’s first close

HDFC Asset Management Company Ltd, which provides mutual fund and portfolio management services, has entered the private credit segment with an alternative investment fund that has marked the first close with a commitment from International Finance Corporation (IFC) as the anchor limited partner.

IFC, the private-sector investment arm of the World Bank Group, has committed Rs 220 crore ($24 million) to HDFC AMC’s Structured Credit Fund-I, according to a press note.

The fund has made its first close and has raised commitments of around Rs 1,290 crore from institutional investors, family offices and ultra-high net-worth individuals. The fund is targeting a corpus of Rs 1,500 crore, and expects to exercise a portion of the available green-shoe option of Rs 1,000 crore. The commitment amount includes sponsor commitment from HDFC AMC of up to 14% of the fund corpus.

The fund will invest in mid-market companies through secured credit instruments. It has already committed Rs 380 crore in three companies. It will target mid-teen returns over a four- to six-year horizon.

HDFC AMC said the fund will improve access to finance for underserved mid-market companies by providing alternative debt financing. It will also help strengthen India’s private credit ecosystem and support the scale up of private credit for mid-market companies. 

“Through this fund, our objective is to offer customised capital with clear risk controls and close engagement with management teams, enabling well-run businesses to scale responsibly while maintaining disciplined underwriting and protecting investor interests,” said Navneet Munot, managing director and CEO, HDFC AMC.

“This investment (from IFC) will expand access to private credit, enabling companies to scale their operations, boost innovation, and expand essential services, supporting sectors ranging from logistics and manufacturing to pharmaceuticals and e-mobility,” he added.

Incorporated in 1999, HDFC AMC manages the HDFC Mutual Fund. HDFC AMC had assets under management of Rs 8.7 trillion as on September 30. The company has joined a few other local AMCs in the private credit segment. Aditya Birla Sun Life Asset Management Company operates two performing private credit funds via the India franchise and two funds through Singapore’s variable capital company structure. Nippon Life India AIF also manages private debt funds while Axis AMC raised its second private credit fund last year.