Key Takeaways
- • Rahul Shah, Managing Partner of Kotak Alternate Asset Managers Limited, told ANI that Indian companies are increasingly looking to alternative investment funds (AIFs) to raise capital as GDP growth drives higher funding requirements.
- • Shah said AIFs are expanding across private equity, venture capital and, increasingly, private credit, giving investors diversification beyond equities, bank deposits and FDs.
- • Shah indicated that growth in the industry could prompt larger alternative asset managers to pursue stock market listings, making them accessible to retail investors.
Summary
Indian companies are increasingly turning to alternative investment funds (AIFs) to raise capital as the economy expands and businesses seek funding options beyond traditional sources, according to Rahul Shah, Managing Partner of Kotak Alternate Asset Managers Limited. Speaking exclusively to ANI on the sidelines of the 4th CII Alternative Investment Fund Summit 2026 in Mumbai on October 14, Shah said rising demand for capital from Indian businesses is helping AIFs become a more established part of the country's financial markets.
Shah attributed the shift to economic growth. "In India, because the requirement of capital is growing, inherently because the GDP is growing, you will see that corporates are also increasingly more open to exploring taking capital from AIFs," he said. AIFs pool money from investors and deploy it into assets beyond traditional stocks and bonds, providing capital through private equity, venture capital and private credit. Private equity and venture capital typically involve investments in companies, while private credit allows businesses to borrow from non-bank investors, offering a channel outside bank lending and public equity markets.
Shah also pointed to rising household wealth in India as a driver. "The AIF industry is gradually getting into the mainstream, given that investors need more options to invest into as India gets wealthier," he said. He added that AIFs offer "a more risk-adjusted return" than conventional products and help investors diversify their asset allocation.
Shah further suggested that the industry's expansion could encourage larger alternative asset managers to list on stock exchanges, which would make them accessible to retail investors. The remarks were made at the CII summit and did not include specific fund sizes or deal figures.
Shah attributed the shift to economic growth. "In India, because the requirement of capital is growing, inherently because the GDP is growing, you will see that corporates are also increasingly more open to exploring taking capital from AIFs," he said. AIFs pool money from investors and deploy it into assets beyond traditional stocks and bonds, providing capital through private equity, venture capital and private credit. Private equity and venture capital typically involve investments in companies, while private credit allows businesses to borrow from non-bank investors, offering a channel outside bank lending and public equity markets.
Shah also pointed to rising household wealth in India as a driver. "The AIF industry is gradually getting into the mainstream, given that investors need more options to invest into as India gets wealthier," he said. He added that AIFs offer "a more risk-adjusted return" than conventional products and help investors diversify their asset allocation.
Shah further suggested that the industry's expansion could encourage larger alternative asset managers to list on stock exchanges, which would make them accessible to retail investors. The remarks were made at the CII summit and did not include specific fund sizes or deal figures.
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