CHENNAI: Sundaram Alternates (SA), the alternative investment arm of the Sundaram Finance Group, on Monday announced that its SA Real Estate Credit Fund V, India’s first ESG-aligned real estate credit fund, has crossed Rs 1,000 crore in capital commitments within three months of its launch in October 2025.
“This reflects continued investor confidence in SA’s Category II AIF platform and its performing real estate credit strategy,” it said in a statement on Monday. The fundraise remains open and is expected to conclude by March 2026, with a targeted final corpus of Rs 1,500 to Rs 2,000 crore.
The fund has attracted commitments from a diversified investor base comprising insurance companies, family offices, corporate treasuries, and ultra-high-net-worth investors. It also includes a sponsor commitment from the Sundaram Finance Group, reinforcing alignment of interest.
"Crossing ₹1,000 crores within three months reflects the confidence that investors place in our underwriting discipline and risk framework. This momentum reflects nearly a decade of sustained effort in building a robust risk management platform for our credit business. As the fundraise progresses toward its final close, our focus remains on disciplined capital deployment, capital protection, and building long-term investor relationships,” said Karthik Athreya, Managing Director, Sundaram Alternates.
At the core of Fund V is a performing credit strategy focused on senior secured, amortising lending to brownfield, cash-generating residential projects. The approach prioritises capital protection and downside risk management through conservative loan-to-value structures and collateral coverage. ESG considerations are embedded into the underwriting and portfolio monitoring process, informing asset selection and governance rather than operating as a separate overlay. This integration strengthens overall credit assessment and portfolio resilience.
Sundaram Alternates has raised over Rs 3,800 crore across five real estate credit funds, delivering IRRs in the range of 18% to 19%. The fund is the fifth offering in SA’s established real estate-backed credit series, which has maintained a “zero capital loss” record since inception in 2017. The platform has maintained a record of full capital repayment with no defaults, across periods including the NBFC liquidity stress, RERA and GST implementation, the COVID-19 pandemic, and recent inflationary cycles.
Investor confidence in ESG-integrated private credit continues to rise as the sector emerges as a meaningful solution to India’s real estate financing needs. The real estate sector is projected to reach $1 trillion by 2030, contribute 13% to GDP, and is supported by strong indicators such as 89 million sq. ft. of office leasing in 2024 and a 35% YoY increase in FDI inflows in Q1 2025.