Simultaneously, several startups are veering away from raising equity capital at discounted valuations. The world of debt mutual funds has witnessed net outflows, as its once-favourable tax treatment was levelled with other fixed-income products due to the removal of indexation benefits. The influx of fresh capital has dwindled, courtesy of tightening market conditions. Consequently, private credit funds find themselves in a more advantageous position when negotiating for higher interest rates, given their status as a scarce source of capital for businesses. These private credit entities continue to tap into opportunities created by the shifting strategies of NBFCs, mutual funds, and conservative banks.
Typically, private credit funds (PCF) invest in the debt or hybrid securities of unrated and lower-rated companies. They offer debt financing to startups and early-stage businesses. While it’s worth noting that private credit comes at a cost, this funding avenue imposes fewer stringent conditions than traditional lenders, providing an alternative for startups that wish to avoid significant valuation reductions through down rounds. Private credit activity in India is experiencing robust growth momentum, with over Rs 30,000 crores deployed across selected transactions in the first half of 2023. With Non-Performing Assets (NPAs) of scheduled commercial banks currently at historic lows, the distressed asset investment pipeline is displaying signs of deceleration. As a result, fund managers are increasingly pivoting toward structured solutions for special situations, such as acquisition financing, bridge-to-IPO funding, and capex solutions. The National Asset Reconstruction Company Limited (NARCL) faces challenges and struggles to scale as originally envisioned.
Bu hikaye BW Businessworld dergisinin 21 October 2023 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber ? Giriş Yap
Bu hikaye BW Businessworld dergisinin 21 October 2023 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber? Giriş Yap
Powerful, Peculiar Perquisites
MOST COMPANIES recognise that people are key to their success. Competition is all about the war for talent. Higher compensations can, in many cases, attract that brilliant leader or the tech genius, but a competitor may well offer even more. This race is financially draining and not really a great strategy.
Shaping The Future Of India's Infrastructure
RUPEN PATEL on the achievements of the engineering and construction major including the iconic projects rendered by it, nation building, focus on sustainable practices and much more
WHY DON'T WE SUE BRITAIN?
I WAS WORKING ON my next column for BW – on one of my favourite themes like ‘Sustainability’, ‘Inclusivity’, ‘India Shining’ etc.
LIFE AND TIMES OF A MEDIA TITAN
DD Purkayastha's autobiography captures his 42-year tryst with the ABP Group, delving into various aspects of his professional and personal experiences, as well as insights into the factors that have shaped his character and career trajectory
THE SONET STRIKES BACK
The sub-4-metre SUV segment in India has been a battlefield for automakers, each vying for supremacy with their unique propositions. With the launch of 2024 Kia Sonet, the South Korean automaker is sharpening its edges in this competitive market
SLEEK, SUBTLE, COMPACT AND EASY TO CARRY
The HP Omen Transcend 14 targets a niche market that is growing day by day. Statistically, never in history, was there a better time to launch a gaming laptop, says Deep Majumdar
Geopolitical Resilience for Indian Companies
It's in crisis that inventiveness is born, as well as discoveries made and great strategies arise. He who overcomes crisis, overcomes himself, without getting overcome. - Albert Einstein
The Sourav Ganguly Era
Lessons in Leadership from Indian Cricket - 2
Leadership Challenges Were Not This Long, Before
LEADING IN TODAY’S dynamic environment presents unprecedented challenges. The list of challenges is never-ending. They include navigating complex decisions, staying resilient, inspiring teams, staying innovative, and continually adapting to the constantly changing ecosystem.
The Supreme Court Emerges as a Net Zero Polestar
'Dharma exists for the welfare of all beings. Hence, that by which the welfare of all living beings is sustained, that for sure is dharma,' - Mahabharata (Shanti Parva 109.10)