Sept 2026 : A key shareholder of India’s Megha Engineering & Infrastructures Ltd. (MEIL) is seeking to raise about $700 million from global private credit investors to finance the acquisition of his uncle’s stake in the infrastructure company, according to people familiar with the matter. If completed, the transaction could rank among India’s largest private credit deals of 2026 and would underscore the growing importance of alternative lenders in funding major corporate and shareholder transactions.
Billionaire PV Krishna Reddy, managing director of Megha Engineering, currently owns about 57% of the company. He is seeking the financing to help acquire the remaining 43% stake held by his uncle, Pamireddy Pitchi Reddy, who serves as the company’s executive chairman, according to one of the people familiar with the discussions. The proposed transaction would consolidate ownership of the infrastructure group within the family.
A consortium of private credit lenders, including Davidson Kempner Capital Management, Elham Credit Partners and Varde Partners, has begun preliminary work on a potential financing structure, the people said. They requested anonymity because the discussions are private. The terms of the proposed facility have not been finalised, and the structure, size and participants could still change as negotiations progress.
Representatives of Megha Engineering, Elham Credit Partners and Varde Partners did not respond to requests for comment, while Davidson Kempner declined to comment.
If concluded at around $700 million, the financing would be one of India's biggest private credit transactions this year. It would be equivalent to almost half of the roughly $1.6 billion private credit financing secured by the Shapoorji Pallonji Group last month. The proposed transaction highlights how private credit funds are increasingly stepping in to provide large, customised financing packages for Indian businesses, particularly where traditional banks may be less flexible or slower in arranging funding for complex acquisitions.
India's private credit market has expanded rapidly in recent years. Investments in the country's private credit sector reached approximately $3.5 billion during the first half of 2026, according to a report by consulting firm EY. While this was less than half the $9 billion recorded during the corresponding period a year earlier, the previous year's figure included the record $3.1 billion financing raised by the Shapoorji Pallonji Group for refinancing purposes.
Moody's Ratings estimates that India's private credit sector has doubled in size over the past five years, reaching around $25 billion in assets under management by the end of 2025. Despite this growth, India's market remains relatively small compared with the United States, where private credit assets under management exceed $1 trillion.
The proposed MEIL financing comes at a significant time for India's infrastructure sector, which is benefiting from strong government spending, expanding connectivity projects and rising demand for roads, highways, water infrastructure, power assets and other large-scale developments. Access to sizeable and flexible private credit could allow established infrastructure companies to manage ownership changes while maintaining investment and project execution.
Founded in Hyderabad in 1989 as a small fabrication unit, Megha Engineering has grown into a major infrastructure and engineering group with projects spanning more than 20 countries. Its portfolio includes tunnels, ports, highways, water systems and power-related assets. The company's growth reflects the broader expansion of India's infrastructure and engineering sector over the past several decades.
MEIL has also been looking to streamline its asset portfolio. The company has been seeking buyers for some of its road assets, with KKR & Co.-backed Vertis Infrastructure Trust emerging as the frontrunner to acquire eight roads from Megha, according to a Bloomberg report in July.
The potential $700 million financing could therefore provide MEIL's shareholders with liquidity while allowing the company to continue focusing on its core infrastructure operations. For the broader sector, the transaction could serve as an important indicator of investors' willingness to provide substantial capital for strategic ownership changes involving established Indian infrastructure groups.
The proposed deal also comes against the backdrop of Megha Engineering's prominent political contribution history. According to Election Commission data released in 2024, the company was the largest donor to Prime Minister Narendra Modi's Bharatiya Janata Party over the preceding five years, purchasing electoral bonds worth about 6.7 billion rupees, or approximately $70 million.
The company's transformation from a modest fabrication business in Hyderabad into a multinational infrastructure player has been marked by expansion across several critical sectors. Its current portfolio covers major engineering and construction projects in India and overseas.
However, the proposed equity acquisition and private credit financing remain at a preliminary stage. No final agreement has been announced, and the financing structure could change before completion. If the transaction proceeds, investors and industry observers will closely monitor how the new ownership structure affects MEIL's capital allocation, asset sales, strategic investments and ability to pursue major infrastructure opportunities in India and international markets.
(Disclaimer :The content of this article is sourced from a news agency and has not been edited by the Mavericknews30 team.)
