Earlier this week, private credit firm Ascertis Credit announced a $520 million first close for its fourth fund, one of the largest first closes for an India-focused private credit vehicle.
In a conversation with Moneycontrol, Ascertis Credit head Kanchan Jain explains what the milestone means, why global LPs’ (Limited Partners) approach to India credit has changed, how the firm plans to deploy capital across sectors, and why she believes India is in the very early innings of its private credit journey.
Q: You’ve recently announced a very large first close for Fund IV. What does this milestone signify for Ascertis?
A: This first close is a very significant deepening of our track record from the time we set out. Our first fund was one of the earliest performing mid-market credit funds in India. With every successive fund, we’ve closed at a meaningfully larger size. Fund IV continues that trajectory.
This (first) close mirrors some very important global and Asia-specific trends. Private credit has become a mainstream asset class, with an important structural role in any high-growth economy. There is real value to both investors and investee companies.
To have a first close of this size for an independent Asia or India manager shows the kind of appetite investors now have for this asset class. It is probably one of the largest first closes for an India credit fund. We’ve also seen very strong re-ups from existing LPs and interesting new commitments from Indian institutions and family offices. The domestic market has deepened significantly.
Q: How is the LP mix split between global and domestic investors for this fund?
A: Broadly, our mix remains the same. We typically raise about 70 percent of our capital globally, and that holds here as well. The fact that fund sizes have grown so significantly and yet we’ve maintained the domestic proportion shows how much the local market has expanded.
Similarly, maintaining the global contribution in a much larger fund reflects the rising appetite for India. India is firmly on the radar for investors today, and that’s evident from a close like this.
Q: Does a larger fund change your strategy, compared to Fund III?
A: Our core strategy remains the same, providing solution capital to high-growth Indian companies. We package non-dilutive capital in the right size, structure and timelines, so that companies can fully capture the market opportunity in front of them. Non-dilutive capital also means domestic wealth creation, because founders and shareholders retain value.
What scale does is expand the range of what we can do — broader sectors, larger transactions, more diverse end-uses. It strengthens our position and allows us to tap a much wider opportunity set for our investors.
Q: Given the current macro environment, which sectors will be the priority areas for deployment?
A: We’ve always focused a lot on domestic sectors. We have strong conviction in India’s fundamentals. Wherever there is export potential, we look at that too. For example, we funded renewable companies that grew into much larger exporters.
Fund IV, like Fund III, is sector-agnostic. That is what has made our funds robust. Our general focus will remain on diversified industrials and manufacturing, diversified services, and infrastructure and logistics-linked companies. Fund IV also has a Southeast Asia bucket, but the heart of the deployment remains India.
One structural advantage India offers is the breadth and depth of deal flow. There is no reason to restrict ourselves to a few sectors in credit, because in credit you want resilience and consistency in returns. Our investors have re-upped because we’ve delivered attractive returns with the level of consistency expected from private credit.
Q: Why introduce a Southeast Asia allocation?
A: It’s limited and relevant only for our dollar investors. It provides diversification, which matters to our global LPs.
Q: For foreign LPs, how attractive is performing credit in India today? Historically, they gravitated toward distressed or special situations.
A: That’s exactly the change in narrative. Ten years ago, everyone wanted to do special or distressed. situations. But the fact that we have a $520 million first close, with a majority of it global, in a performing credit strategy shows how LPs are now looking at India with a more nuanced lens.
They’re not saying “this is India, an emerging market, I need to make 20 percent.” They’re asking: "What is the underlying credit risk? What is the expertise of the manager? What are gross and net returns?" And on that basis, they’re making larger commitments than earlier.
Globally too, private credit appetite has shifted toward resilient, risk-adjusted return profiles, not just headline high-yield strategies.
Q: India’s consumption had a soft patch earlier in the year but festive demand was strong. What’s your reading of the consumption cycle?
A: India doesn’t fire only on consumption. Consumption has its ups and downs. But our economy fires on multiple cylinders.
Infrastructure spend increased significantly in the last 5–7 years and we’re maintaining that pace. That has a huge multiplier effect on industrial demand. We’re also seeing strong momentum in services — especially business services, engineering services, technology and digital transformation.
Our portfolio is very diversified. In a 35–40-investment portfolio, we might have 18–20 industries represented. That diversification is India’s strength. Beneath the broad headlines of consumption and capex, there is a range of underlying sectors that are performing well.
Q: The RBI recently allowed banks to participate in acquisition financing. How does that change the private credit landscape?
A: It’s a big positive. Globally, central banks always have restrictions on banks lending into acquisition opportunities, so RBI’s earlier stance was not out of line. Updating that regulation is welcome.
Bringing bank capital into acquisition financing increases capital availability and will spur M&A activity. Private credit serves a different risk-return profile, a different underwriting model and different end-uses, compared to banks. So the two are complementary, not substitutes.
Banks may not want large lumpy exposures; partnering with private credit funds allows them to participate across a broader deal set. Overall, it’s good for the market.
Q: Globally, some worry that private credit may be becoming a bubble. How do you see the risks, especially after events like the First Brand collapse?
A: Let’s split this into the US and India.
In the US, growth has been very strong in recent years — stronger than the preceding two decades. So, naturally people ask whether it has gone too far. But one isolated default, whether due to fraud or poor underwriting, does not translate into a systemic risk. Every credit market has expected default and loss ratios.
Most LPs and GPs (General Partners) I'm meeting in the US acknowledge the growth but do not see systemic risk.
India, on the other hand, is in the third or fourth year of what is a 20-year journey. We are nowhere near the questions of excesses or bubbles. Our regulatory setup is strong; banks play a limited role in private credit.. Defaults will happen everywhere — banks, public markets, fixed income — but that doesn’t imply systemic stress.
We are at a very early, very exciting stage of growth.
Q: Family offices have also been active in writing direct private credit cheques. How do you see their role evolving?
A: Indian family offices are very sophisticated. Private credit brings resilience, attractive returns and regular distributions. It plays an important role in their portfolios.
Direct investing is possible for large family offices, but the value a fund manager brings is significant. If you invest Rs 100 crore directly across two investments, you essentially have two concentrated exposures. But Rs 100 crore with an experienced manager could translate into 30 securities with full diligence, monitoring and a dedicated team.
Most family offices increasingly prefer coming through fund managers, while some may participate in co-investments if they have underwriting capabilities.
