- PV Krishna Reddy, Managing Director of Megha Engineering & Infrastructures, is seeking $700 million in private credit to buy out his uncle's 43% stake in the company.
- A consortium of lenders including Davidson Kempner Capital Management, Elham Credit Partners, and Varde Partners has begun preliminary work on the financing structure.
- The family settlement is targeted to finalize by March 2027.
- Megha Engineering was founded in 1989 as a small fabrication unit in Hyderabad.
- PV Krishna Reddy currently owns 57% of Megha Engineering, while his uncle Pamireddy Pitchi Reddy holds 43%.
- This move aims to consolidate ownership of the firm under PV Krishna Reddy.
- The financing proposal is reportedly being discussed with a group of global private credit firms.
- Private credit refers to loans provided by non-bank financial firms rather than traditional public-sector banks.
- This method has become increasingly popular in India for large, complex transactions due to its faster processing and flexible terms.
PV Krishna Reddy, the Managing Director of Megha Engineering & Infrastructures Ltd (MEIL), is negotiating a $700 million private credit deal to acquire the remaining 43% stake from his uncle, Pamireddy Pitchi Reddy, the executive chairman. This transaction is part of a planned family settlement aimed at consolidating ownership of the firm under Reddy.1358
A consortium of lenders, including Davidson Kempner Capital Management, Varde Partners, and Elham Credit Partners, has begun structuring the financing, which is expected to be one of India’s largest private credit deals this year. If completed, it would be just under half of the $1.6 billion raised by the Shapoorji Pallonji Group last month.2
The funds will help Reddy consolidate his ownership, as he currently holds 57% of MEIL. The company has a significant portfolio of infrastructure projects globally, including tunnels, highways, and power assets. However, borrowing such a large sum creates a substantial debt burden, raising concerns about repayment, especially if cash flow from projects is delayed.
The private credit market in India has seen rapid growth, with investments reaching $3.5 billion in the first half of 2026, according to EY. This highlights the increasing reliance on private credit for large corporate transactions, as traditional lenders may not offer the necessary flexibility.
Investors will closely monitor the completion of this family settlement, targeted for March 2027, and the management's ability to structure the debt without straining the company's operational balance sheet.
“The deal would be among India's largest private credit transactions this year, nearly half the $1.6 billion raised by Shapoorji Pallonji last month. India's private credit market has doubled to about $25 billion in assets under management, with $3.5 billion invested in H1 2026.”
Whalesbook
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