💰 Rise of Private-Debt Funds in the Unlisted Market

Summary: As interest rates climb, private-debt funds are attracting capital away from equity. Discover why unlisted debt instruments—from NBFC bonds to structured notes—are becoming a compelling diversification tool.

1. Yield Advantage Over Public Debt

Private-debt yields of 12–15% outpace corporate bond yields (7–9%) on public exchanges.⁶

2. Structured Credit & Covenant Protections

Senior-secured loans and mezzanine tranches offer downside buffers, with covenants ensuring priority over equity in events of default.⁷

3. Illiquidity Premium & Hold Periods

Investors earn an illiquidity premium for multi-year lock-ins (often 3–5 years), boosting total returns by 1–2% annually.⁸

4. Regulatory Changes Boosting NBFC Debt

RBI’s new funding norms for NBFCs (2024) require greater reliance on market borrowings, expanding the unlisted-debt universe.⁹

5. How to Access Private-Debt Funds

Platforms like InvestoEdge and RurashFin offer curated private-debt fund options, with minimum tickets starting at ₹5 lakhs.⁴

References

1. Morningstar India – Private Debt Yields
2. Invesco – Structured Private Credit
3. Deloitte India – Illiquidity Premium
4. RBI – NBFC Funding Norms
5. Rurash Financials – Private Debt Funds