Anicut Capital closes Rs 1,275-crore private credit fund, to back consumer, engineering and SaaS players

Since its first close, Grand Anicut Fund IV has invested in 15 companies, deploying around Rs 1,100 crore. The fund has exited two investments with an average exit internal rate of return (IRR) of about 19 percent.

The portfolio spans consumer, engineering services, SaaS, manufacturing, hospitality and shipbuilding. Anicut has written average cheques of Rs 80 crore, along with warrants of about Rs 8 crore per transaction.

With this fund, Anicut’s total managed assets stand at roughly Rs 4,500 crore across debt and equity strategies.

GAF IV is a domestic fund backed by a GIFT City-based dollar feeder, built to channel global capital into India. It offers foreign investors a tax- efficient gateway to participate in India’s growth story.

Anicut Capital’s portfolio spans consumer, tech and lifestyle brands such as Wow! Momo, SUGAR Cosmetics, Wingreens, Blue Tokai, ShareChat, mcaffeine and Milky Mist, along with newer bets like D2C home-fragrance brand Goodmelts.

Chennai roots and a regional lending focus

Anicut Capital began its journey in Chennai where it launched its first private credit fund of about Rs 400 crore in 2015.  The firm, founded by Ashvin Chadha and IAS Balamurugan, derives its name from the historic Kallanai dam, also known as the Grand Anicut, reflecting its focus on building durable connections between founders and capital.

“This experience has positioned Anicut Capital as the gateway to South India for investors seeking meaningful exposure to the region,” said Balamurugan, who is also the managing partner, told Moneycontrol.

Nearly 60 percent of Anicut’s debt investments support businesses in Tamil Nadu, Kerala, Karnataka and nearby regions. Many of these companies operate without external debt beyond Anicut’s capital, prepay loans ahead of schedule and return as repeat borrowers.

“We consistently observe a distinctive cultural approach to debt here, where promoters value long-term commitment, stability and responsible leverage,” Balamurugan said.

How private credit demand has shifted

The profile of companies seeking structured credit has changed dramatically over the past four years. Earlier, Anicut saw demand largely from growth-stage companies using debt to complement equity raises.

“The funding slowdown since 2022 has shifted demand towards mature businesses that prioritise non-dilutive capital,” Balamurugan said. “As a lender, we focus on operating discipline, margin clarity and predictable cashflows.

Companies increasingly use structured credit for expansion, acquisitions, buybacks and balance sheet optimisation rather than as a stop-gap funding option.

A more institutional underwriting framework

Anicut has also tightened and formalised its due diligence process over successive fund cycles. The firm now blends qualitative judgment with structured risk filters shaped by multiple macro cycles, including demonetisation, GST implementation, the IL&FS crisis and the Covid-19 pandemic.

“With Grand Anicut Fund IV, we place huge emphasis on cashflow quality, corporate governance and the feasibility of internally generated or event-linked exits,” Balamurugan said.

Team expansion without cultural drift

Anicut started with a five-member team operating from a two-bedroom apartment in Chennai. It now employs around 40 people in Chennai, Bengaluru, Delhi and GIFT City in Ahmedabad. The firm has also begun building a global investor interface through its GIFT City operations.

“What has stayed constant is our culture,”  Balamurugan said. “Our limited partners and promoters keep coming back because they understand our processes and values.”

Equity funds next on the roadmap

Alongside private credit, Anicut plans to launch two new equity strategies — one focused on early-stage investing and another on late-stage growth equity. The latter will target businesses approaching strategic outcomes such as acquisitions, strategic sales or public listings.

“We remain sector agnostic, but conviction comes from founders who build resilient businesses rather than chase short-term valuations,” Balamurugan said.

"At the heart of it, this journey has been less about chasing scale and more about staying true, to our values, to the people we work with, and to the ecosystem we’ve always believed in," he added.

Dry powder builds for startups 

India’s private markets continue to build dry powder even as dealmaking remains selective. Venture and alternative asset managers have closed and announced new funds over the past few months, signalling sustained investor interest despite a slower deployment environment.

Chennai-based deeptech investor Speciale Invest recently launched a Rs 1,400 crore Growth Fund II to back early-stage deeptech startups, following the close of its earlier fund focused on sectors such as space, AI, advanced manufacturing and energy.

At the same time, private credit has emerged as a key beneficiary of this shift. Asset managers such as Motilal Oswal Alternates and DMI Alternatives have either launched or closed private credit vehicles targeting mid-market and late-stage companies seeking non-dilutive capital.