Megha Engineering Managing Director Seeks $700 Million in Private Credit for Stake Buyout

A key shareholder of Megha Engineering & Infrastructures Ltd. is looking to raise approximately $700 million from global private credit investors to acquire his uncle's stake in the company. If completed, this transaction would rank among the largest private credit deals in India this year.

A consortium of lenders, consisting of Davidson Kempner Capital Management, Elham Credit Partners, and Varde Partners, has started preliminary work regarding the structure of the financing. According to sources familiar with the matter, terms have not yet been finalized and discussions remain subject to change. Representatives for Megha Engineering, Elham Credit Partners, and Varde Partners did not respond to requests for comment, while Davidson Kempner declined to comment.

Billionaire PV Krishna Reddy, who currently serves as the managing director of Megha Engineering and owns 57% of the company, is raising the capital to finance the acquisition of the remaining 43% stake. That remaining portion is held by his uncle, Pamireddy Pitchi Reddy, who is the executive chairman of the firm.

The planned deal highlights the expanding role of private credit in financing major corporate and shareholder transactions in India, where traditional lenders often face constraints in offering funding flexibility for specific types of acquisitions. The transaction would amount to just under half of the equivalent $1.6 billion raised by the Shapoorji Pallonji Group last month.

Data from consulting firm EY shows that investments in India's private credit market reached $3.5 billion in the first half of 2026. This is less than half of the $9 billion recorded in deals during the same period a year earlier, which included a record $3.1 billion raised by the Shapoorji Pallonji Group for refinancing. Meanwhile, Moody's Ratings indicates that India's private credit sector has doubled in size over the past five years, reaching approximately $25 billion in assets under management at the end of 2025.

Founded in 1989 as a small fabrication unit in Hyderabad, Megha Engineering has grown to execute projects in more than 20 countries. Its operations span sectors such as tunnels, ports, highways, water systems, and power assets. The company has also been exploring the sale of certain road assets, with the KKR & Co.-backed Vertis Infrastructure Trust emerging as the frontrunner to acquire eight roads from Megha, according to prior reports.

"This proposed transaction demonstrates the growing maturity and depth of India's private credit market for executing large-scale promoter buyouts. As traditional banking channels face regulatory and structural limitations in providing flexibility for complex shareholder transactions, alternative credit funds are stepping in to bridge the gap. For large infrastructure firms like Megha Engineering, utilizing global private credit allows stakeholders to restructure ownership efficiently while navigating capital constraints in the traditional lending ecosystem." — Dr. Shishir Gupta, Founder & CEO, StartupLanes