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(Bloomberg) — India’s Kotak Alternate Asset Managers Ltd. is aiming to raise as much as $2 billion for its third private credit fund, according to a top executive, highlighting strong investor appetite for the asset class even as global concerns grow.
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The firm is targeting a final close by September, and is betting on opportunities across sectors such as data centers, pharmaceuticals, diagnostics, steel and cement, Managing Director Srini Sriniwasan said in an interview.
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The launch comes at a time when private credit markets in the US have been shaken by a series of high-profile setbacks, with lenders marking down investments. Rising redemption requests have also forced firms including Morgan Stanley and Cliffwater LLC to cap withdrawals from some of their funds.
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Sriniwasan said India’s market works differently. Most regional funds are closed-ended, meaning investor capital is generally locked until maturity, reducing the risk of sudden outflows. Still, he flagged currency volatility as a key concern for overseas investors. The rupee is under pressure due to surging energy prices and recently hit record lows against the dollar.
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“Currency depreciation is a risk that global investors have to factor in,” he said.
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Even so, private credit is gaining momentum in India. As banks tighten credit and the country’s infrastructure funding needs rise, more companies are turning to alternative financiers.
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The market expanded 35% to $12.4 billion in 2025 from a year earlier, according to data compiled by consulting firm EY. Activity picked up after Shapoorji Pallonji Group last year raised $3.4 billion in India’s biggest private credit deal, offering yields as high as 19.75%.
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Kotak’s new Strategic Situations Fund will primarily invest in debt, with options to convert into equity, Sriniwasan said. The fund will be raised through Kotak Alternate’s unit in GIFT City, India’s only international financial hub.
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Kotak has previously launched two private credit strategies — the $1 billion Kotak Special Situations Fund and the $1.5 billion Kotak Strategic Situations Fund — backing companies including Sify Technologies, AGS Transact Technologies and Nuvoco Vistas Corp. It also rolled out an infrastructure vehicle that manages $664 million.
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