Copyright © HT Digital Streams Limited All rights reserved. Mansi Verma 2 min read 11 Dec 2025, 15:10 IST With its previous fund fully deployed, Axis is moving quickly to capture the momentum in structured credit. (Pixabay) Summary Fund III will target an initial corpus of ₹ 1,000 crore, with a green-shoe option of another ₹ 1,000 crore. 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 sharply scaled 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 the end of February,” says Nachiket Naik, head of structured credit at Axis AMC. “This fund will be double the size of the previous one because we see sufficient demand and a strong pipeline.” With its previous fund fully deployed, Axis is moving quickly to capture the momentum in structured credit. Private credit deployment in India reached $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 wider financing gaps in infrastructure and real estate have helped boost activity. Globally, the private credit market exceeds $3 trillion, EY estimated, while PwC pegged India’s market at around $10 billion in deal size in 2024, with assets under management at around $25 billion. Axis AMC is India’s eighth largest mutual fund house with assets under management (AUM) of about ₹3.7 trillion, of which about ₹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, is almost fully deployed and is delivering returns in line with the promised ~14%,” Naik said, adding that he expects similar performance from the new vehicle. Average ticket sizes will rise from ₹60-65 crore to around ₹125 crore in the new fund, underscoring the push towards larger mid-market deals at a time when competition has intensified. India’s private credit market is in its busiest phase yet, with a flurry of new entrants ramping up fundraising and established players accelerating rollout. Naik said funding gaps are widening as companies seek more flexible capital. “Single-A and triple-B companies have traditionally gone to NBFCs (non-banking finance companies), but NBFCs today do not have the capital to grow their corporate books. This leaves a huge unaddressed space with increased 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 that attracts both local pools and global managers and prompts asset managers, insurers and non-bank lenders to build dedicated capabilities. As a result, it is increasingly being used by investment firms as a deliberate public diversification sleeve,” said Muhija. Partner, Co-Head of PE & VC Practice, Kochhar & Co. Axis plans to continue to focus on conventional mid-market manufacturing and industrial businesses while selectively deploying in passive infrastructure themes such as renewable energy, warehouses and data centers. The fund will stay away from NBFCs and new age businesses, which Naik says are showing early signs of stress, especially in unsecured loans. “AMC-owned credit funds, including ours, largely play in the 13-14% space because institutional investors prefer moderate risk with predictable accruals,” he added. Get all the corporate news and updates on Live Mint. Download the Mint News app to get daily market updates and live business news. more topics #private credit funds #AIFs #Investors Read next story
