Alternative Investment Portfolio Update – July 25

Key Financial Highlights for July 2025

FPI Outflows Driven by Trade Tensions

Foreign Portfolio Investors pulled out ₹5,524 crore from Indian equities in July, raising total 2025 outflows to ₹83,245 crore. Analysts attribute the exit to heightened U.S.–India trade uncertainty and tepid corporate earnings.

Market Slump: Worst July Since 2019

Indian equities fell significantly, making it the worst month for the Nifty since 2019. This decline was fueled by weak first-quarter earnings, delay in a formal trade deal, and softness in IT stocks.

IMF Raises Global Growth Forecast

The IMF bumped up its global GDP forecast: 2025 growth to 3.0% and 2026 to 3.1%, noting resilience in consumer spending and front‑loaded trade ahead of U.S. tariff deadlines. Risks from trade wars and rising fiscal deficits persist. The forecast for India is still one of the highest in the world!

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Alternative Investments, Defaults, and Delays

We have created a table to make it easy for everyone to track the latest status of ongoing delays and delays on various platforms and the current updates around them.

Currently, below are the key new updates on the various delays across Alternative Investment platforms.

• Kredx Vvpl Delay
• Grip AGS Transact Update
• Growpital Update

Kredx Vvpl Delay

Customer / Buyer: ICICI Bank Limited
Vendor / Seller: VVP Business Logistics Pvt. Ltd., Mumbai, Maharashtra
Originally Expected Maturity Date: 16-May-2025

This deal, facilitated via KredX, has been experiencing delays. While the vendor has made minor part-payments till 10-June-2025, a significant portion of the repayment remains outstanding.

According to communications with the KredX Investor Service Desk, the delay is attributed to “operational reasons” on the vendor’s side. However, no firm timeline has been provided for the pending payment.

Concerns About the Escrow Mechanism

Typically, KredX operates using an Escrow Account mechanism to protect investor interests:

• The Enterprise (buyer) — in this case, ICICI Bank — is expected to deposit invoice payments into an Escrow Account managed by KredX.

• This account is designed to act as a neutral intermediary. Neither the buyer nor the vendor should have direct control over it.

• After funds are received in the Escrow, KredX should disburse them directly to investors.

However, in this particular case, it appears that the funds may have been routed directly to the vendor, bypassing the escrow mechanism. This raises two key concerns:

1. Why was the Escrow protocol not followed for this transaction?

2. If the buyer has already paid, why is the vendor delaying onward payments to investors?

Such deviations undermine the core structure designed to ensure timely and secure repayments.

Takeaway

As of now:

• A substantial portion of the funds is still pending.

• KredX has not committed to a clear repayment timeline.

• The working of the escrow structure in this deal appears unclear or bypassed, which is concerning from a risk management standpoint.

This case highlights the importance of consistent enforcement of platform protocols, particularly in Escrow-based invoice discounting deals, and the need for greater transparency from intermediaries.

• Sammunati
• Spandana Spoorthy
• Moneyboxx
• Trucap
• Finkurve
• Criss Financials – Early Repayment Done
• Dvara KGF
• Lendingkart
• Satin
• Defaults – Trucap

TruCap Finance Bond Default – July 2025

Default & Downgrade Highlights

• On July 16, 2025, CARE Ratings downgraded ₹150 crore worth of TruCap Finance NCDs (Non-Convertible Debentures) to “D”, indicating a formal default. This was accompanied by a downgrade of its ₹750 crore long‑term debt facilities.

• The default stems from a liquidity crunch, with ₹72.28 crore in pending NCD payments, translating into severe strain on cash flows.

Impact on Investors

• Approximately 1,100 retail investors faced a sudden cessation of interest and principal repayments. Many were promised fixed returns of 13–13.5%, based on earlier BBB or BB+ ratings

Alternative Investment Portfolio Updates

In our endeavor to enhance knowledge about Alternative Investment Funds and PMS  in India, we covered sessions with experts on various funds. We recently arranged a webinar with the experts as well.

Neo Special Credit Opportunities Fund

The fund is positioned as a high-yield, mid-market private credit vehicle, offering structured, collateral-backed lending to companies in need of tailored capital solutions. With an experienced team, substantial fundraising, and early deployment momentum, it targets attractive risk-adjusted returns (~22–24% gross) over a 5-year horizon. It suits investors seeking yield-rich, private debt exposure, with an emphasis on security and active management, but comes with meaningful illiquidity and execution risks.

Fund Overview

• Category: SEBI‑registered Category II AIF

• Maiden fund launched by Neo Asset Management Pvt Ltd.

• Target fund size: ₹2,000 cr; successfully closed at ₹2,575 cr from HNIs and MFOs over ~15 months

• Objective: Provide customized credit to mid‑market corporates facing special-situation funding needs, aiming for portfolio diversification and yield enhancement.

 Return Profile & Term

• Target gross IRR: ~22–24% p.a.; cash coupon: ~14–16% p.a. over 5-year tenor

• Tenure: ~5 years.

• Fund structures drawdowns and deploys capital via 3–4 scheduled drawdowns over a 12-month deployment phase

 Investment Strategy

• Focus on operating, EBITDA-positive, mid-market companies requiring bespoke credit — e.g., capex, acquisition, working capital, bridge, mezzanine/holdco financing

• Investments are secured, often with collateral, including inventory, receivables, fixed assets, and personal guarantees.

• Preference for strong promoters and structured risk mitigation: rigorous due diligence, strong documentation, external oversight, and active asset monitoring.

Fund Activity & Track Record

• Deployed capital into 12 investments with 2 successful exits within the first 15 months

• Example deal sizes: ~₹40–70 cr initiations with expected IRRs ranging 14–17%.

 Risk & Disclaimer Highlights

• Fund carries high risk, including the potential for total capital loss.

• IRR figures are gross, before fees, carry, taxes,a expenses

• Investments are long-term, illiquid, and target sophisticated investors only.

You can register below to get access to the webinar and details about the product

Explore Neo Credit

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PMS Performance July

Below is the snapshot of top top-performing PMS in India for July. Fill up the form below to download the latest information available on the funds below.

PMS Information

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Short-Term Investments