InCred Asset Management, the asset management arm of fintech startup InCred, closed its maiden credit fund, InCred Credit Opportunities Fund-I, at INR 660 Cr last week.
The fund has received capital from wealthy individuals, family offices, and corporate treasuries, ET reported.
It has invested in 23 companies from the fund, including Blue Stone, Stellar Value Chain, Entero Healthcare, and MoneyWise, and is aiming for returns of 16-18%.
The credit fund initially aimed for a corpus of INR 500 Cr, with a green shoe option of INR 500 Cr. A credit fund is essentially a debt mutual fund scheme which invests in lower rated debt securities for higher returns.
InCred has already invested INR 560 Cr from the fund, with the average investment size being approximately INR 30 Cr.
Saurabh Jhalaria, chief investment officer at InCred, told ET that 85% of the capital has already been deployed. The funds have been raised from HNIs who have invested INR 1-5 Cr, family offices who contributed INR 10-15 Cr, and select corporate treasuries that have each invested INR 25-50 Cr.
He added that tax changes around debt mutual funds and market-linked debentures have led to increased fund flows to private credit funds from domestic investors.
The fund has a life cycle of four years from its closing, with an average internal rate of return (IRR) target of 17.5%. It has invested across B2B and B2C companies, consumer businesses, financial institutions, and clean tech mobility firms, the report said.
Most of these investments are structured as monthly amortising loans, guaranteeing a steady stream of principal repayments from the borrowers.
InCred’s asset management arm reached its first funding milestone by raising INR 300 Cr from prominent family offices and high-net-worth individuals in November 2022.
Founded in 2016 by former Deutsche banker Bhupinder Singh, InCred offers personal, home, education, SME, and two-wheeler loans to retail customers and MSMEs.
The asset management arm, which is led by Bhupinder Singh and Mrinal Singh, was established in 2019. It offers a range of alternative investment opportunities to investors, including its Emerging Business Fund (supporting listed emerging businesses) and two Alternative Investment Funds (for mid and small-cap stocks), among others.
Further, InCred has announced its intention to raise up to INR 300 Cr through a public offering of non-convertible debentures (NCDs) commencing on October 25, with the offering set to conclude on November 7.
Of the net proceeds, InCred intends to allocate 75% for purposes such as onward lending, financing, and repayment of existing borrowings, which include interest and principal. The remaining 25% will be earmarked for general corporate needs.
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