Artha Global ₹700 Cr debut in private credit – Phoenix Triton financing

 

🏦 Introduction

Indian private credit is recording a pivotal moment—Artha Global Opportunities Fund, backed by a ₹5,000 Cr AIF, has debuted with a massive ₹700 Cr non-convertible debenture (NCD) infusion into Phoenix Triton—a Grade‑A commercial real estate project in Hyderabad’s Financial District 

This landmark deal not only accelerates the completion of a high-end office tower but redefines the structuring and scale of private credit in India.

In this blog, Manika TaxWise delves into the deal's structure, strategic implications, market context, and what it means for borrowers and lenders going forward.

1. Deal Overview: What’s on the Table?

• Amount: ₹700 Cr (~USD 82 Mn)

• Instrument: Four-year NCD with variable returns tied to sales performance—includes interest floor and cap 

• Purpose: Last-mile financing to complete a 2.8 million sq ft, 41‑floor, LEED Gold–certified Phoenix Triton tower on a 3.15-acre plot 

• Advisor: AZB & Partners (legal), and BSR & Co (tax) 

✅ Key Innovation

A variable-return NCD model balances cash-flow support for the developer with upside potential for investors—a win‑win compared to rigid term loans.

2. Phoenix Triton: Project Snapshot

Feature	Details
Location	Financial District, Hyderabad
Size	2.8 mn sq ft
Floors	G+41
Certifications	LEED Gold
Amenities	Smart tech, double-height lobbies, sky lounges, clubhouse, sports arena, business centre, full backup & water systems
Developer	Phoenix Global Spaces – 24-year legacy, 40% market share in Hyderabadi commercial real estate

An iconic addition to Hyderabad’s skyline, Triton stands poised to meet demand in India’s thriving commercial real estate sector.

3. Artha Global’s Strategic Play

• Fund Size: ₹5,000 Cr Category III AIF managed from GIFT City, India 

• Asset Strategy:

  1. Distressed-asset investments

  2. Private credit to profitable Indian corporates

  3. PE-style investments including venture debt 

• Notable First: First private credit deal in India via this fund—a statement of intent 

🔍 Why this Matters

• Flexible funding alternative: As bank credit tightens, this NCD provides structured, non-dilutive capital.

• Risk-returns alignment: Sales-linked returns distribute risk equitably between lender and borrower.

• Global credibility: As a Foreign Portfolio Investor (FPI) relocated from Mauritius and top 10 GIFT City manager, this move builds international confidence and domestic capability 

4. Indian Private Credit – A Growth Story

• Market Growth: From sub-$2 Bn to nearly $25 Bn in AUM over 10 years, India accounts for ~30% of APAC private credit by 2025

• Trendsetters:

  • Avendus (>₹1,000 Cr), Neo AM ($233 Mn), Franklin Templeton (₹205 Cr), and Synergy Capital ($715 Mn) are raising new funds 

  • Kotak and InCred also expanding, totaling billions in mid‑late stage private credit 

• Drivers: Bank lending constraints, slower public markets, and increasing borrower preference for tailored private credit.

💡 Takeaway

Private credit is filling a critical financing gap in Indian business—especially in capital‑intensive sectors like real estate.

5. What This Means for Stakeholders

For Developers (Borrowers)

• Cash Flow Relief: Tied repayment supports completion without burdening ongoing liquid resources.

• Execution Focus: Allows developers to concentrate on delivery rather than refinancing.

For Lenders (Private Credit Funds)

• Upside Visibility: Sales-linked cap boosts potential returns.

• Secured Structuring: Assets underneath the NCD provide downside protection.

For Investors

• Diversification: Exposure to real-world, private credit assets with risk-adjusted returns.

• Transparency & Governance: Managed by established fund structures with legal and tax compliance.

For the Market

• Benchmark Creation: Sets a template for future structured deals.

• Deeper Ecosystem: Opens pathways for AIFs and private credit channels to grow in India.

6. Future Outlook & Practical Tips

1. Structure Optimally

   • Employ interest floors & caps.

   • Link ROI to project or business performance metrics.

2. Seek Advisory

   • Engage top-tier legal, tax, and financial consultants early.

3. Validate Developer Track Record

   • Ensure transparency in cash flows and delivery timelines.

4. Mitigate Risks

   • Use escrow accounts, security charges, and reserve clauses.

5. Monitor Market

   • Watch emerging funds, AUM growth trends, and policy interventions.

7. Conclusion

Artha Global’s ₹700 Cr leap into private credit via NCD for Phoenix Triton is an inflection point for India’s financing ecosystem. Bridging the gap between conventional bank loans and equity, this structure offers stability, flexibility, and reward—setting a new standard in deal craftsmanship.

Both borrowers and lenders should view this as a blueprint: smart structuring, aligned incentives, and strong governance. As India’s private credit market matures, expect more such tailored solutions—reshaping how capital flows into growth assets.

FAQs

1. What is private credit?
Financing provided by non-bank institutions, such as AIFs, using instruments like NCDs or loans—offering bespoke capital solutions outside equity or traditional bank debt.

2. How does a variable-return NCD work?
Interest payments fluctuate based on project performance, bounded by a minimum and maximum rate, aligning lender returns with borrower success.

3. What makes Phoenix Triton attractive?
A LEED Gold Grade‑A project in a prime location. Its amenities, smart design, and 40% market share speak to its commercial viability 

4. Why is private credit rising?
Stringent bank norms, thinner public markets, and borrower demand for flexible capital are driving its growth.

5. How can investors benefit?
Access to structured, performance-linked returns, asset-level security, and the expanding Indian real estate pipeline make private credit an attractive asset class.