How Axis AMC’s ₹2,000 Cr private credit push could reshape India’s lending market

Synopsis: To meet the raging demand for quick and flexible loans, Axis AMC is going to double its private credit fund to Rs. 2,000 crore. With banks and NBFCs being constrained in terms of capital, Axis is willing to take the risk of filling the gap, which is getting bigger and bigger, in the financing ​‍​‌‍​‍‌​‍​‌‍​‍‌market.

A private credit fund is essentially a large pool of money from which the gathered resources are then handed out as loans to companies. In contrast to banks, which have to abide by strict rules, these funds can provide loans that are quick and flexible, further reducing stress and time constraints.

About Axis Fund

Axis​‍​‌‍​‍‌​‍​‌‍​‍‌ AMC, one of the famous Indian fund houses, is taking a big step that can change the way companies in India borrow money. The fourth-largest private bank is coming up with a new private credit fund of up to Rs 2,000 crore.

Axis AMC states that this fund will be their second credit fund, twice the size of the previous one, because the demand for such loans is increasing very fast, and a lot of companies are saying that they need money to grow. The fund of their first round is already completely invested, which is a clear indication that businesses are actively borrowing through this ​‍​‌‍​‍‌​‍​‌‍​‍‌channel.

Axis’s new fund (Fund III) will be targeting to collect Rs 1,000 crore, and in case of necessity and demand for the shares, Axis AMC will be allowed to raise another Rs 1,000 crore through a “green-shoe option”, essentially a facility to take more money if more investors want to participate in the issue.

Axis​‍​‌‍​‍‌​‍​‌‍​‍‌ AMC is the eighth-biggest mutual fund house in India with assets under management (AUM) worth around Rs 3.7 trillion, out of which nearly Rs 2.1 trillion is in equities and Rs 1.2 trillion in fixed income as of November. The fund house got into the alternatives business in 2019, and currently, it manages close to Rs 7,000 crore across its AIFs, portfolio management services, private credit and private equity ​‍​‌‍​‍‌​‍​‌‍​‍‌segments.

Why Private Credit Is Booming in India?

Axis AMC is of the opinion that the time could not be better, as India’s private credit market is growing at a very fast rate. According to an EY report, in the very first half of 2025, private credits worth $9 billion (Rs 81,000 crore) was disbursed, which is 53 percent more than the previous year.

Globally, the private credit market is enormous, more than $3 trillion (Rs 270 lakh crore). In India, the market is close to $10 billion (Rs 90,000 crore) by deal size with AUM nearly $25 billion (Rs 2.25 lakh crore), and experts say that this mode of lending is no longer small or niche but is becoming a standard way for companies to raise ​‍​‌‍​‍‌​‍​‌‍​‍‌money.

Why Companies Are Turning to Private Credit?

This​‍​‌‍​‍‌​‍​‌‍​‍‌ expansion is largely because typical lenders, such as banks and especially Non-Banking Financial Companies (NBFCs), do not have enough capital to lend extensively at the moment. To put it simply, a great number of companies which were taking loans from NBFCs are now unable to get funds. 

This situation has caused the difference between the amount of money that companies need and the amount that lenders can provide to become very large. Axis AMC is willing to bridge this gap with the help of the structured loan facility for medium-sized businesses. 

These are the businesses which include manufacturing companies, industrial firms, and infrastructure-linked businesses like renewable energy, warehouses, and data centres. But Axis AMC is staying away from lending to NBFCs and new-age companies as these segments are experiencing financial difficulties. They choose safer borrowers who can give them predictable ​‍​‌‍​‍‌​‍​‌‍​‍‌returns.

Axis AMC’s Strategy to play in this industry?

Axis AMC’s new fund will give bigger loans than before. Earlier, the average loan amount was around Rs 60–65 crore. Now, it will rise to around Rs 125 crore per deal, showing a shift toward larger mid-market borrowers. 

Investors are also showing strong interest because private credit funds usually earn returns of 13–14 percent, which is higher than other debt options but still considered relatively stable. 

How This Could Change India’s Lending Landscape? 

This​‍​‌‍​‍‌​‍​‌‍​‍‌ major Rs 2,000 crore initiative by Axis AMC might have a significant impact on India’s lending environment, as a result of which more companies will be able to get loans that are more flexible, faster, and customised, quite notably at a time when traditional lenders are not in a position to meet the demand. Private credit is not a mere alternative route anymore; it is gradually becoming the mainstream of India’s financial system. 

As a result of the increased participation of investors in this segment and the rising number of companies borrowing through it, the lending market in India may turn out to be very different in the next few years. To put it simply, Axis AMC is making a huge wager on the future of lending in India and, if this trend is sustained, it would be an entirely new way of businesses raising money and ​‍​‌‍​‍‌​‍​‌‍​‍‌growing.

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