Singapore’s RV Capital plans to venture into private credit in India

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RV Capital Management’s Indian unit plans to raise 8 billion rupees ($96. 1 million) through its first personal loan fund in India, joining a developing list of global managers setting up businesses in the country.

The fund will invest primarily in medium-sized companies, while investing up to 20% of the capital in local currency index bonds, said Shyamal Karmakar, Managing Director and Chief Investment Officer of RV Capital Advisory India Pvt. , a unit of Singapore. The five-year personal loan fund targets “a yield of 14 rupees to 16 per cent,” he added.

RV Capital is entering India at a time when Asia’s third-largest economy is poised to become a hotspot for personal credit in the region, in part due to regulations prohibiting the use of bank loans for mergers and acquisitions. India-centric personal debt assets under control nearly doubled to $15. 5 billion in December 2022 from a year earlier, according to financial data provider Preqin.

Also Read: BPEA’s Jain Predicts India’s Credits Will Double in Two Years

India’s RV fund is independent of the sector, Karmakar said, but will steer clear of financing for asset construction, subprime debt and also from corporations for which lenders have agreed to a haircut but whose control has changed.

“We are open to asset-backed financing from holding companies, developers and acquisitions,” he said.

It will be in the design of the transaction and promises to lessen the threat of credit and ensure recovery in a situation where the underlying credit is not performing well, he added.

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