KKR set for global launch of Rs 5,000 cr credit fund for India
US private equity giant KKR Inc’s India arm is set to launch an India-dedicated Rs 5,000-crore credit fund. The launch comes at a time when liquidity conditions are getting tough, NBFCs have been moving away from wholesale financing, and large banks have been struggling for capital.
The fund, which will be the third in a series of credit funds from the New York-headquartered alternate asset manager, targets to reap strong demand for structured credit from Indian companies. Marketing roadshows are due to start by mid-May.
KKR was the first to launch credit funds in India under the Alternative Investment Funds (AIFs) regime, way back in 2013, through which it has raised capital from domestic investors in India for two funds so far.
The proposed third fund is expected to be much larger, with both off-shore and domestic components. Marketing roadshows are scheduled to commence next month, said sources close to the situation.
KKR operates its corporate credit business in India through an NBFC and credit funds. It has been shaping this market since 2009, as the pioneer in structured credit financing, having executed close to $6-billion of such financings so far. In the past six months, KKR is one of the very few firms that have been active in this space, having executed financings for the Shapoorji Group, the JK Group, the TVS Group, Baby Memorial Hospital and Prince Pipes, amongst others. The firm is said to have underwritten close to ₹10,000 crore in financings over the past 18 months, including over ₹1,000 crore in the first quarter of 2019 itself.
The US private equity giant launched its first credit fund towards the end of 2013. Together with co-investments by limited partners, this ₹650-core fund is said to have invested about ₹1,500 crore, and has been fully utilized. This fund is also said to have returned capital fully to its investors, which is a metric that limited partners track for the first- time funds.
It launched its second fund towards the end of 2016, raising over ₹1,300 crore. The fund is expected to be completely deployed within the next quarter, sources said.
Apart from corporate credit, KKR has been active in India across private equity and real estate credit, and has collectively deployed close to $10 billion in the country across these three verticals.
Credit demand in India would grow at around 13%-14% on average between fiscals 2019 and 2020, significantly faster compared with the 8% seen in fiscal 2018, rating agency CRISIL said in February.
Source: ET Tech