Avendus PE investment advisors launches Rs 4,000 crore private credit fund

Avendus PE Investment Advisors has unveiled its third private credit offering, Avendus Structured Credit Fund III (ASCF-III), which aims to raise as much as Rs. 4,000 crore, including a green shoe option of Rs. 2,000 crore.

The fund will invest in a variety of sectors such as pharmaceuticals, healthcare, manufacturing, consumer goods and technology. It will focus on secured credit for operating and holding companies, with select hybrid structures also under consideration.

Targeting larger deals and healthy returns  

According to Anshul Jain, executive director of Avendus Structured Credit Funds, ASCF-III will typically look at deal sizes between Rs. 200 crore and Rs. 500 crore, drawing on Avendus Group’s proprietary corporate network for stronger deal flow.

The fund aims to build a diversified portfolio of 12 to 18 transactions, targeting a gross portfolio internal rate of return (IRR) of 16% to 18%. Avendus’ private credit platform has been one of the most active in India, completing deals worth over Rs. 12,000 crore in the past 12 years.

Firm's past performance 

Avendus’ first private credit fund, ASCF-I, launched in 2017 and delivered an 18% IRR. It fully returned capital to investors by 2022. The second fund, ASCF-II, was introduced in 2022 and has been entirely deployed across 14 deals, with an anticipated IRR of 17%.

These performances underscore Avendus’ ability to navigate multiple cycles while maintaining steady, risk-adjusted returns for investors.

Rising popularity of Private Credit

Speaking about the broader landscape, Nilesh Dhedhi, managing director of Avendus Finance, said India’s mid-market enterprises are increasingly turning to private credit as a flexible financing tool. He noted that private credit transactions have surpassed $20 billion over the past three years, bridging the gap between traditional debt and equity.