HDFC AMC Partners with IFC to Boost Private Credit for Mid-Market Enterprises
HDFC AMC and IFC are partnering to enhance private credit access for India's mid-market enterprises. IFC will invest up to ₹220 crore as an anchor investor in HDFC AMC's Structured Credit Fund - I. The fund has raised ₹1,290 crore at its first close and targets ₹1,500 crore, aiming for mid-teen returns over 4-6 years.
The investment is significant for enhancing private credit access to mid-market enterprises, which can contribute to economic growth. However, the direct impact on HDFC AMC's overall financials may take time to materialize and is medium term.
The partnership with IFC and the successful first close of the fund, along with significant investor commitments, indicate positive momentum and growth prospects for HDFC AMC.
HDFC Asset Management Company Limited (HDFC AMC) has announced a strategic partnership with the International Finance Corporation (IFC), a member of the World Bank Group. This collaboration aims to enhance access to private credit for India's mid-market corporate sector through HDFC AMC's Structured Credit Fund - I, a Category II Alternative Investment Fund (AIF).
The fund has successfully completed its first close, raising commitments of approximately ₹1,290 crore from a diverse group of institutional investors, family offices, and Ultra High Net Worth Individuals (UHNIs). IFC will be the anchor investor, contributing up to ₹220 crore. The fund is targeting a total corpus of ₹1,500 crore and has the option to exercise a green-shoe option of ₹1,000 crore. HDFC AMC will also contribute up to 14 percent of the fund's corpus as a sponsor commitment.
The fund intends to deliver mid-teen returns over a 4-to-6-year horizon by investing in secured credit instruments across various sectors, excluding real estate. It has already committed ₹380 crore to three deals. This initiative is expected to strengthen India's private credit ecosystem, support job creation, and drive innovation by providing timely and flexible debt financing to underserved mid-market companies.
Navneet Munot, MD & CEO of HDFC AMC, expressed confidence in the partnership with IFC, highlighting the shared vision to support India's mid-market enterprises, which are crucial for industrial output and employment. Imad N Fakhoury, Regional Division Director for South Asia at IFC, emphasized the role of this investment in expanding private credit access, fostering innovation, and supporting the government's vision for economic resilience. The private credit market in India is projected to grow significantly, from USD 19 billion in 2023 to USD 60-70 billion by 2028.
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