Kotak Alternate Asset Managers Ltd. is seeking to raise up to $2 billion for its third private credit fund, according to Bloomberg reports. The firm is targeting a final close by September.
The proposed Strategic Situations Fund will primarily invest in debt instruments, with provisions to convert into equity where required. The fund will be raised through Kotak’s unit in GIFT City.
The fund is expected to allocate capital across sectors including data centres, pharmaceuticals, diagnostics, steel, and cement. These sectors continue to see funding requirements as companies expand operations.
Kotak has previously launched 2 similar strategies, raising $1 billion and $1.5 billion respectively. These funds have backed companies such as Sify Technologies, AGS Transact Technologies, and Nuvoco Vistas Corp.
Private credit activity in India has increased in recent years. According to EY, the market expanded 35% year-on-year to $12.4 billion in 2025.
The growth is linked to tighter bank lending conditions and rising capital needs in infrastructure and other sectors. Companies are increasingly turning to alternative financing routes.
Large transactions have also contributed to activity levels. Shapoorji Pallonji Group raised $3.4 billion through private credit last year, with yields reported at up to 19.75%.
The fundraising comes at a time when private credit markets in the US have faced pressure. Some funds have marked down investments, while firms including Morgan Stanley and Cliffwater LLC have restricted withdrawals amid higher redemption requests.
In contrast, most Indian private credit funds are closed-ended. This structure limits investor withdrawals before maturity, reducing the likelihood of sudden outflows.
However, currency movement remains a concern for overseas investors. The rupee has weakened against the US dollar, influenced in part by higher energy prices.
Private credit in India continues to attract capital despite global uncertainties. Fund structures and domestic demand have supported activity, even as currency risks remain a consideration for investors.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Mutual Fund Investments are subject to market risks, read all the related documents carefully before investing.
Published on: Mar 18, 2026, 1:09 PM IST
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