Nippon India Credit Opportunities – I

The Nippon India Credit Opportunities AIF aims to deliver superior risk-adjusted returns by investing in a diversified portfolio of fixed-income instruments issued by high-quality issuers. The fund targets a mix of periodic and back-ended cash flows, leveraging bespoke structuring solutions to achieve optimal outcomes. It focuses on generating meaningful extra yield over traditional fixed-income products while maintaining a strong emphasis on credit quality.

The fund’s philosophy revolves around investing in credit opportunities with robust cash flow visibility and established repayment capabilities. It aims to create a sector-agnostic, diversified portfolio through bottom-up research, ensuring a high degree of security and ring-fencing for repayments. By targeting transactions with credit quality rated between A and BBB (including shadow ratings), the fund balances risk and returns effectively.

1. Targeted Yield Range: The fund invests in debt instruments with annualized yields ranging from 12% to 16%.
2. Portfolio Construct:
   • Comprises 8–12 issuers at full deployment.
   • Weighted average maturity: 3–3.5 years.
   • Maximum exposure to a single issuer: ~12.5% of the fund commitment.
3. Security & Diversification:
   • Investments primarily in listed and unlisted debentures.
   • Use of robust security structures such as escrow mechanisms, pledges, and guarantees.
4. Exit Strategy: Investments are structured to enable exits within 5.5 years, leveraging mechanisms such as refinance, asset sales, or corporate guarantees.