Motilal Oswal Alternates to launch Rs 3,000 crore private credit fund as it enters new segment

Motilal Oswal Alternates (MOA) has announced its foray into the fast-growing private credit market, initiating regulatory approvals to launch its first private credit fund. The proposed fund will seek to raise Rs 3,000 crore, with an additional Rs 1,500-crore green-shoe option, marking a significant expansion of the firm’s alternatives platform at a time when demand for customised debt solutions is accelerating in India.

The entry comes as private credit emerges as a major financing avenue for India’s mid-market companies, many of which are seeking flexible, non-dilutive capital to fund the ongoing capital expenditure upcycle. With traditional bank lending often constrained and public markets not always favourable, private credit is increasingly filling the gap for companies with strong cash flows, robust governance and clear growth visibility.

MOA’s proposed fund will follow a diversified lending strategy, focusing on opportunities across growth-oriented sectors. The vehicle aims to deploy capital across growth credit, performing credit, special situations and dislocated credit, using a mix of structured and collateralised instruments. By combining secured lending with structured upside participation, the fund intends to generate superior, risk-adjusted returns, blending steady debt yields with the possibility of equity-linked gains.

Currently, Motilal Oswal Alternates manages $3.2 billion across its private equity and real estate platforms. The firm has raised more than Rs 23,000 crore through 11 funds to date. With the addition of the private credit strategy, the platform is expected to surpass $3.5 billion in assets under management over the next year, strengthening its position as a full-spectrum alternatives manager.

Vishal Tulsyan, Executive Chairman of Motilal Oswal Alternates, said the move represents a natural extension of the group’s capabilities. “Expanding into private credit is a natural evolution of our business strategy. The private credit business will have synergies with our existing platforms and draw upon the strength and knowledge of the Motilal Oswal Group,” he said. Tulsyan added that the firm’s experience in private equity and real estate gives it deep insight into corporate balance sheets, promoter behaviour and sectoral cycles—critical tools for underwriting credit risk.

Echoing this view, Rakshat Kapoor, Head of Private Credit at Motilal Oswal Alternates, said the market is witnessing rising demand for flexible capital among mid-market corporates with proven operating histories. “The proposed fund looks to invest in growth capital and special-situation-oriented transactions. We expect hybrid transactions to increase, where we can participate in equity upsides while generating regular private credit yields,” he said.

With private credit gaining traction globally and domestically, MOA’s entry underscores the strategic importance of bespoke lending in India’s next phase of corporate growth. The new fund positions the firm to tap into this expanding opportunity while offering investors an alternative source of yield and diversification.