INDIA Law and Practice Contributed by: Utsav Johri, Sucheta Bhattacharya and Nishal Makharia, JSA Advocates & Solicitors
before interest, taxes, depreciation and amortisation (EBITDA), has not been predominant. Recurring revenue financing in the form of discounting transactions and loans against scheduled revenues has been used by companies with stable revenues. There are certain private credit funds that provide funding to these companies. 1.7 Deal Sizes, Fund Sizes and Fundraising The size of private credit transactions depends on the requirements of the borrowers and the ability of the lenders to provide such limits, which usually fall in the “mid-cap” range. An indicative range for Indian private credit funds is USD10 million to USD50 million, but there are examples of such funds lending up to USD150 million. In contrast, certain deals have been in the range of USD150 million to USD300 million, or even higher: the largest deal was valued at USD3.3 bil - lion. The private credit market also saw various deals between USD500 million and USD1 billion. High net worth individuals and family offices contin - ue to fund Indian private credit players, as the fixed income stream is attractive for them as an investment option. 1.8 Impending Regulation and Reform FPIs and AIFs are required to register with the Secu - rities Exchange Board of India (SEBI) and are gov - erned by the regulations issued by SEBI. Furthermore, any investment by FPIs in NCDs is regulated by the Foreign Exchange Management Act, 1999 of India (FEMA) and other rules and regulations framed by the RBI and SEBI from time to time. Currently, there are no proposed reforms or legislation that will affect lending by private credit funds in India at a macro level. SEBI has approved the issuance of a model format for the debenture trust deed (the document pursuant to which NCDs are issued) for the issuance of listed NCDs (Model DTD). While parties will be permitted to modify the Model DTD, any deviations will need to be disclosed to the stock exchange. This change is envisaged to standardise the documents relating to debt securities, and to ensure increased participation
by investors. While the Model DTD is yet to be noti - fied, SEBI has notified the enabling amendments to the relevant regulations. Furthermore, the RBI has recently issued and noti - fied the Foreign Exchange Management (Borrowing and Lending) (First Amendment) Regulations, 2026 (Amendment Regulations), which had the following effects: • liberalised the ECB regime by expanding the bor - rower (including limited liability partnerships and partnerships) and lender eligibility; • enhanced the borrowing limits; • liberalised end use provisions (including permitting acquisition finance for strategic control); • relaxed security and guarantee requirements; • introduced flexible pricing norms; • relaxed maturity periods; and • eased refinancing conditions, thereby materially broadening cross-border financing opportunities. Amongst other things, the ECB regime will now allow borrowers to raise funding for acquisition finance and/ or the purchase of land for own residential or com - mercial use, and will also provide a financial boost to developers and entities engaged in the infrastruc - ture sector. ECBs with a minimum average maturity of three years are expected to follow market-driven pricing, allowing wider investor participation (including by private credit funds). The RBI has also simplified India’s regulatory frame - work by consolidating various directions and circu - lars into comprehensive Master Directions, while also splitting them based on the different types of regu - lated entities. This approach enhances clarity, reduc - es interpretational ambiguity, and ensures targeted compliance aligned with the nature of each regulated entity. As mentioned previously, the RBI has also noti - fied a revised framework for acquisition finance by commercial banks in India, where such acquisition financing could be extended to eligible listed entities, eligible unlisted entities and special purpose vehicles set up by such entities.
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