Private credit gains ahead of IPOs as founders raise stakes

Private credit is increasingly being used ahead of public listings to help founders and promoters consolidate stakes or bolster capital as investors seek partial or full exits amid equity market uncertainty.

- Priyamvada C

Companies including Zepto, InMobi, Lenskart, Vivriti, Leap India and Zetwerk have tapped private credit ahead of IPOs.

(REUTERS)

Over the past 12-14 months, founders or promoters of firms including Symbiotec Pharma, Vivriti Group, Zepto, InMobi, Lenskart, Leap India and Zetwerk have engaged in such deals ahead of their initial public offerings (IPOs), people in the know told Mint.

"Credit is increasingly being used as a flexible pool of capital to capture these opportunities and, in some cases, to provide exits to investors, especially when public/IPO markets are facing headwind," said Aakash Desai, chief investment officer and head of private credit at 360 ONE Asset, which closed its fifth private credit fund at $400 million earlier this week.

"We see this trend coming back in a big way and continuing as we deploy capital to finance such transactions."