Religare Credit Advisors, an Indian private debt firm, has raised 512 crore ($78.4 million; €70.9 million), for its maiden debt fund after around a year on the road.
With 80 percent of the proceeds invested already, the fund manager is in the process of drawing up plans for a US-dollar fund, which it will likely launch early next year, Kanchan Jain (pictured), chief executive and principal managing partner, told PDI.
“There is a couple of good reasons,” to look at private debt in India as an emerging market strategy, she continued.
“It has always had a strong and deep private corporate market and a range of corporates to choose from,” she said.
Even with the prospect of a slowdown in the emerging markets, as a result of falling commodity prices, she said that India is a big beneficiary of soft commodity prices and a 7 percent-plus growth rate over the next couple of years.
“I think the financial markets are still relatively in deadlock so there is a huge opportunity to provide efficient customised growth capital to corporates. And earn higher returns without having to go down the credit curve,” Jain said.
Religare Credit Opportunities Fund, Scheme I has invested in secured corporate debt instruments. It has a three-year tenure and is targeting IRRs of about 20 percent.
The investor profile is mainly made up of domestic investors comprised of high-net-worth individuals, family offices and a few corporates, Jain said. There are also a few non-resident investors through key funds in India.
Jain said that the fund is unique to Indian debt funds in that it is a well-diversified credit fund, unlike other sector-focussed funds or distressed debt funds in India. She also highlighted how the fund is comprised of underlying loans to mid-market established companies in India.
The fund invests in sectors including agri-biz, textile, food and beverage and real estate. Within real estate, it has invested in brownfield projects and residential real estate transactions.
Religare has made 12 loans of two to three years in length using the fund’s capital so far, matching the tenure of the vehicle.
The firm, part of Religare Global Asset Management (RGAM), a $20 billion asset management firm focused on alternatives, has around $250 million in private debt assets under management at present.
It has made 29 transactions over the last four years totalling 1500 crore and 10 successful exits to date, Jain said in a statement. The firm has also committed 25 percent of the capital in the fund, the highest in the industry to date, Jain added.