MUMBAI: Axis Asset Management Company (AMC) is set to launch its third private credit alternative investment fund (AIF) next week, aiming to raise up to ₹2,000 crore, a senior executive told Mint. The move comes as the fund house looks to scale sharply in a private-credit market that is drawing record interest even as traditional lenders pull back.
“We are launching the fund next week and expect the first close by end-February,” said Nachiket Naik, head of structured credit at Axis AMC. “This fund is targeted to be double the size of the previous one...because we see adequate demand and a strong pipeline.”
With its previous fund fully deployed, Axis is moving fast to capture the momentum in structured credit. Private-credit deployment in India hit $9 billion across 79 deals above $10 million in the first half of 2025, a 53% jump from a year earlier, according to an August EY report. Stable rate expectations and widening financing gaps in infrastructure and real estate helped lift activity.
Globally, the private credit market exceeds $3 trillion, EY estimated, while PwC pegged India’s market at roughly $10 billion in deal size in 2024, with assets under management at around $25 billion.
Private credit in India has rapidly moved “from a niche alternative asset class into a mainstream institutional” one, with AUM now above $25 billion and investments crossing $9 billion in H1 2025, said Rajeev Vidhani, partner at Khaitan & Co.
The year also saw India’s largest-ever private credit deal—the $3.4 billion SP Group transaction—underscoring the market’s momentum. Growth is fuelled by an under-leveraged mid-market, regulatory gaps left by traditional lenders, and “an attractive yield spectrum of 12–22%.”
Vidhani added that private credit is now “a core vertical for most investment platforms,” with PE funds, domestic institutions, and global managers intensifying competition—yet the market “remains under-served,” leaving significant room to grow.
Axis AMC is India’s eighth-largest mutual fund house with assets under management (AUM) of about ₹3.7 trillion, of which roughly ₹2.1 trillion is in equities and ₹1.2 trillion in fixed income as of November. The fund house entered the alternatives business in 2019 and now manages nearly ₹7,000 crore across its AIFs, portfolio management services, private credit and private equity strategies.
Axis' Fund III will target an initial corpus of ₹1,000 crore with a green-shoe option for another ₹1,000 crore. Axis launched its last credit vehicle in mid-2023 with a target of around ₹1,250 crore and closed it at ₹740 crore.
“The last fund, ₹740 crore, has been almost fully deployed,” said Naik, adding that he expects the same for the new fund.
Average ticket sizes will rise from ₹60-65 crore to about ₹125 crore in the new fund, underscoring the push toward larger mid-market deals at a time when competition has intensified. India’s private-credit market is in its busiest phase yet, with a wave of new entrants stepping up fundraising and established players accelerating deployments.
Naik said financing gaps are widening as companies seek more flexible capital. “Single-A and triple-B companies traditionally went to NBFCs (non-banking finance companies), but NBFCs today don’t have the capital to grow their corporate books. That’s leaving a large unaddressed space with higher demand and shrinking supply,” he said.
“The private credit ecosystem in India has evolved from a niche alternative into a vibrant, mainstream part of the capital stack drawing both domestic pools and global managers and prompting asset managers, insurers and non-bank lenders to build dedicated capabilities. As a result, it is increasingly used by investment firms as a deliberate diversification sleeve alongside equity and public debt,” said Ketan Mukhija Partner, co head of PE & VC Practice, Kochhar & Co.
Axis plans to continue focusing on conventional mid-market manufacturing and industrial businesses while selectively deploying in passive infrastructure themes such as renewables, warehousing and data centres.
The fund will remain away from NBFCs and new-age businesses, which Naik said are showing early signs of stress, especially in unsecured lending. “AMC-owned credit funds, largely play in the 13-14% space because institutional investors prefer moderate risk with predictable accruals,” he added.