India’s National Investment & Infrastructure Fund (NIIF), a quasi-sovereign fund backed by the Indian government and global investors including the Abu Dhabi Investment Authority (ADIA), is gearing up to raise as much as $2bn for its latest private credit fund, according to a report by Bloomberg.
The report cites NIIF CEO Sanjiv Aggarwal as outlining plans to structure the fund to invest in performing credit amid growing investor appetite for high-yield debt at a venture capital event in Mumbai.
The initiative comes at a time when India’s private credit market is witnessing significant momentum, with over $1bn in fundraises already on the books for this year. The expansion is being driven in part by Prime Minister Narendra Modi’s aggressive infrastructure push, which has spurred a rising need for middle-market financing across sectors from solar energy to road construction. Additionally, a growing class of high-net-worth individuals is seeking to diversify their portfolios beyond traditional equity and fixed income investments.
An EY report from last year highlighted that private credit investments in India totalled $9.2bn across 163 deals. However, the report also warned that intensifying competition in the performing credit space could make it increasingly challenging to close deals, potentially leading to compromises in lending standards.
NIIF currently manages four funds across various asset classes. Its largest, the Master Fund, is focused on infrastructure investments. The other vehicles include a private markets fund, a strategic opportunities fund that takes direct stakes in companies, and an India-Japan private equity fund dedicated to environmental preservation. NIIF’s roster of backers also features major international investors such as AustralianSuper and Singapore’s Temasek Holdings Pte.
