Vivriti seeks $250 mn for India's debut ABS private debt investment

By Divya Patil

Vivriti Asset Management Pvt. is launching a new fund for investing in small and medium-sized companies, terming it the country’s first for private credit investment in asset-backed securities. 

The Chennai-based company is targeting a total of $250 million for its ‘Vivriti India Retail Assets Fund’ and has already raised $106 million from International Finance Corp. and M&G Investments, Vineet Sukumar, founder and managing director of Vivriti, said in an interview. The firm has 18 months to raise the balance, he said, adding the fund’s tenor is 10 years.  

“It will be a performing private credit, which is targeting a rupee return of 11%-12% for its investors, implying a dollar return of anywhere between 7% to 8%,” Sukumar said.

The debut takes place as private credit activity in India picks up. Restrictions on bank lending — such as to fund mergers and acquisitions — make it an attractive proposition, but optimism can also quickly fade. 

Carlyle Group Inc. was in the early stages of exploring an entry into the country’s market, Bloomberg reported earlier this month citing people familiar with the matter. 

Vivriti says there’s large unsatisfied demand for debt financing among India’s medium-sized companies, with limited access to capital markets, according to its website. 

Under Vivriti’s new vehicle, mid-sized non-bank financial companies and microfinanciers will sell their loans in sectors related to SME financing, commercial vehicle lending, two-wheeler funding and microfinancing to a special purpose vehicle. The SPV will issue securities backed by loan receivables and raise funds from Vivriti’s credit fund.  

The $250 million fund will be domiciled at India’s GIFT city and will hold 40 to 50 ABS investments at any point in time, Sukumar said. That would limit exposure to a single investment to just $5 million to $7 million, he added. 

Vivriti will also use its technology platform that enables it to ‘slice and dice’ large data sets in order to keep a close watch on the performance of its assets. 

Vivriti Asset was founded in 2019 and focuses on providing debt financing to domestic mid-market companies. The latest fund launch is its eighth in private credit space.