TVS Capital Funds Launches Private Credit Arm TVS Alts

TVS Capital Funds (TCF) has entered the private credit market with the launch of TVS Alts, extending its business beyond private equity. The proposed fund targets an initial corpus of INR 750 crore, with a green-shoe option of INR 500 crore.

The fund will focus on secured lending to performing companies with sound credit profiles and adequate security. Ticket sizes will range from INR 40 crore to INR 100 crore, with targeted returns of about 17%. It will follow a sector-agnostic strategy covering bridge financing, pre-IPO financing and M&A-related funding. The initial fund is expected to make about 14-15 investments, and TVS Alts plans to explore additional private credit funds over the next three to five years.

Like TCF’s private equity business, the strategy will be built predominantly on domestic capital. Insurance companies, bank treasuries and corporates are expected to be among the investors.

TVS Alts has received internal approvals and filed applications with the Securities and Exchange Board of India (SEBI). It expects regulatory approvals in the coming weeks, and active deal origination will begin after that. It aims to complete the first close within six months of approval and the final close within 12–14 months. The team has evaluated 42 potential opportunities, of which two or three are being considered against the fund’s underwriting and pricing requirements.

Shyam Srinivasan, Executive Chairman of TVS Alternatives and Senior Advisor and Operating Partner at TCF, is a co-founder of TVS Alts and is leading the platform. Manish Makaria, who previously worked with TCF and SBI Funds Management, will serve as Managing Partner. The board will include Prasad Gopalan, former senior executive at the International Finance Corporation (IFC); banker Ashutosh Khajuria; Mani Krishna Iyer, former SIDBI executive and industrialist Srialalitha Gopal.

TVS Alts is a subsidiary of TCF, which holds 90% of the platform, with Srinivasan holding the remaining 10%. TCF was founded in 2007 by Gopal Srinivasan and recently closed its fourth private equity fund with a corpus of nearly INR 4,000 crore. It plans to explore other financial services verticals, including wealth management and asset management, over the long term.

Shyam Srinivasan said: “Credit quality in India, particularly in the mid-market segment, is holding out well. We believe the private credit market has significant potential, particularly as banks become more selective in their lending to mid-sized businesses. This creates an opportunity for alternative credit platforms to address the financing requirements of fundamentally sound companies.”