M&As: Private credit funds unfazed by entry of banks

PRIVATE CREDIT PLAYERS seem unperturbed by the Reserve Bank of India's (RBI) decision to allow banks to fund mergers and acquisitions (M&As).

- RAGHAVENDRA KAMATH & MAHESH NAYAK

According to these entities, acquisition funding is one among the several types of deals they undertake, comprising 15-25% of their total books. Promoter financing and loan against shares are among the other areas of operations.

Kapil Singhal, managing partner — private credit, True North, said the RBI’s decision will have a miniscule impact on private credit funds.

"Acquisition financing is only one of the many uses. Other uses include shareholding consolidation, pre-IPO holdco deals, loans against listed shares, repayment cash flow mismatches, etc," Singhal said in a LinkedIn post.

He added that only two out of 27 True North private credit deals (23 executed and four in the process) were acquisition financing.

Private credit investments reached $9 billion across 79 deals (above $10 million) in the first half of 2025, according to EY India.