Megha Engineering's PV Krishna Reddy taps $700 million private credit to buy out uncle's stake

Billionaire PV Krishna Reddy, Managing Director, Megha Engineering & Infrastructures Ltd, is seeking to raise about $700 million from global private credit investors to fund the purchase of his uncle, Pamireddy Pitchi Reddy's, stake in the company, Bloomberg reported on Monday.

If completed, the transaction could rank among India's biggest private credit deals of 2026, underscoring the growing role of alternative lenders in large corporate and shareholder transactions.

$700 million financing plan for Megha Engineering stake

A group of private credit firms, including Davidson Kempner Capital Management, Elham Credit Partners and Varde Partners, has begun preliminary work on a potential financing structure, according to people familiar with the matter cited by Bloomberg.

The sources requested anonymity as the discussions are private. They added that the terms of the financing have not been finalized and could still change.

Krishna Reddy currently owns 57% of Megha Engineering and is seeking funding to acquire the remaining 43% stake held by Pitchi Reddy, the company's executive chairman, according to one of the people cited in the report.

The proposed stake buyout remains at the financing-discussion stage. The structure and terms of the reported private credit deal have not been finalized, and the discussions could still change, according to people cited by Bloomberg.

Deal could rank among India's largest private credit transactions

If the proposed financing goes ahead, it would be one of India's largest private credit transactions this year.

The potential $700 million deal would be slightly less than half the $1.6 billion raised by the Shapoorji Pallonji Group last month. The transaction also comes at a time when private credit is becoming an increasingly significant source of funding for large corporate transactions in India.

Private credit can offer borrowers financing structures and flexibility that may not always be available through traditional lenders, particularly for certain acquisition-related transactions.

According to an EY report cited by Bloomberg, investments in India's private credit market stood at $3.5 billion in the first half of 2026. That is less than half the $9 billion recorded during the same period a year earlier, which included the record $3.1 billion raised by the Shapoorji Pallonji Group for refinancing.

India's private credit market expands

India's private credit industry has continued to grow despite remaining much smaller than its US counterpart.

According to Moody's Ratings, India's private credit sector had doubled in size over five years, reaching around $25 billion in assets under management at the end of 2025.

That figure remains a fraction of the US private credit market, where assets under management exceed $1 trillion.

The potential Megha Engineering financing, therefore, comes against a backdrop of increasing activity by private lenders in India's corporate financing landscape.

Megha Engineering's infrastructure footprint

Megha Engineering was established in 1989 as a small fabrication unit in Hyderabad. The company has since expanded its operations and has projects across more than 20 countries, spanning infrastructure segments including tunnels, ports, highways, water systems and power assets, according to its website.

The company has also been looking to sell some of its road assets. Vertis Infrastructure Trust, backed by KKR & Co., emerged as the frontrunner to acquire eight roads from Megha Engineering, Bloomberg reported in July.

Megha's Engineering's political donations

Megha Engineering has also featured prominently in India's political funding landscape.

According to data from the 2024 Election Commission, Megha Engineering was the largest donor to Prime Minister Narendra Modi's Bharatiya Janata Party (BJP) over the preceding five years. The company purchased around ₹6.7 billion ($70 million) worth of electoral bonds during that period.