Kotak PE arm eyes $2 bn fund as private credit demand soars

Kotak Alternate Assets Managers Ltd is looking to raise a $2 billion fund—Kotak Strategic Solutions Fund (KSSF) III—to provide loans or structured credit to Indian companies.

- Mansi Verma & Sneha Shah

Kotak is also expanding with a ₹4,000-crore yield-and-growth fund and a ₹1,000-crore life sciences fund.

Kotak Mahindra Group's private equity arm plans to lend ₹800-1,000 crore to 12-15 growth-stage companies seeking tailored credit solutions, Easwar Karra, the firm's deputy managing director, said.

The asset manager is in talks with global investors, such as sovereign wealth funds and pension funds, in line with its previous strategies. This time, however, it also plans to raise a portion of the corpus from domestic institutions. Its KSSF I and II were sized at $1 billion and $1.5 billion, respectively.

"We also see strong demand from domestic institutions this time," Karra said. "Credit remains Kotak's mainstay—our domestic underwriting capability has consistently been stronger than most other managers, including banks. Our NPL (nonperforming loans) levels have traditionally been much lower than the industry average," he added.