**Motilal Oswal Enters Private Credit with ₹3,000 Crore Fund**
**Meta Description:** Motilal Oswal Alternates launches a ₹3,000 crore private credit fund to support high-growth firms in India’s evolving credit landscape.
**URL Slug:** motilal-oswal-private-credit-fund-launch
**Motilal Oswal Enters Private Credit with ₹3,000 Crore Fund**
Motilal Oswal Alternates has officially entered the private credit market with the launch of its inaugural fund, amounting to ₹3,000 crore. This strategic move aims to tap into the rapidly expanding asset class, focusing on supporting high-growth and profitable companies. Rakshat Kapoor, who leads the Private Credit division, highlighted the increasing demand for credit in India, which is projected to grow at a rate of 6-7% or more.
As India continues its capital expenditure cycle, Kapoor noted that traditional funding sources, such as banks and public or private equity, may not fully meet the capital requirements of businesses. Consequently, a significant portion of funding is expected to come from credit funds. The new fund, which includes a green shoe option of ₹1,500 crore, will combine secured lending with equity-style diligence, aiming to deliver risk-adjusted returns through both fixed debt yields and potential equity-linked gains.
Kapoor explained that the fund is designed to generate returns through a mix of regular fixed contracted yields and returns tied to equity performance. This innovative approach positions the fund as a hybrid credit option, distinguishing it from existing credit funds in the market. With a six-year tenure and a three-year deployment period, the fund has already attracted investments from family offices, ultra-high-net-worth individuals, and institutional investors. Investment sizes are expected to range from ₹250-500 crore, targeting 15-20 mature companies with an operational history of 10-15 years and revenues between $100-150 million.
The launch of this fund comes at a pivotal moment as India’s credit landscape undergoes significant changes. Traditional lenders are becoming more selective, creating new opportunities for private credit solutions. The fund aims to cater to mid- to large-sized corporations across various sectors, including manufacturing, engineering, supply chain, and healthcare, which require timely, flexible, and non-dilutive capital.
Despite a thriving equity capital market, private capital often experiences volatility, making liquidity a challenge. Kapoor emphasized that their private credit fund will address these challenges, facilitating exits for equity shareholders and allowing promoters to consolidate their stakes through buybacks or joint ventures. He noted that private credit is increasingly competing with equity as companies seek non-dilutive capital for growth, acquisitions, and addressing short-term credit disruptions.
Motilal Oswal Alternates has previously raised over ₹23,000 crore across 11 private equity and real estate strategies, positioning itself to exceed $3.5 billion in assets under management.
**FAQ**
**What is the focus of Motilal Oswal’s new private credit fund?**
The fund aims to support high-growth, profitable companies in India by providing flexible, non-dilutive capital, addressing the increasing demand for credit in the evolving financial landscape.
