Tourism Finance Corporation of India (TFCI) is accelerating its transformation beyond traditional tourism financing by entering into strategic alliances to set up Category-II Alternate Investment Funds (AIFs) focused on hotels and real estate.

The move signals a broader repositioning of the company as a diversified non-banking financial company (NBFC), with the new AIF platforms aimed at equity and structured investments across asset-heavy sectors where TFCI has established domain expertise, according to a report by BusinessWorld.

The initiative is part of its wider growth strategy to deepen exposure across multiple asset classes while reducing dependence on conventional term lending. In addition to AIF-led investments, the company plans to expand its lending activities across hospitality, real estate, social infrastructure, logistics, manufacturing, non-banking financial companies (NBFCs), housing finance companies (HFCs), and asset reconstruction companies (ARCs).

The company also offers loan-against-property products and financing against listed shares, broadening its retail and structured credit portfolio.

TFCI’s diversification drive shows changing dynamics in India’s credit markets, where alternative investment structures are increasingly being used to fund capital-intensive sectors such as hotels and commercial real estate. The AIF route allows lenders to participate in equity-linked upside while managing balance sheet risks.

Historically positioned as a niche lender to India’s tourism sector, TFCI has, in recent years, been steadily expanding its product offerings and sectoral exposure. The shift comes amid rising investment activity in hospitality and infrastructure-linked assets, supported by domestic travel demand and urban development.

Meanwhile, its sectoral expansion and AIF strategy are aimed at building a scalable and resilient business model, aligned with evolving market opportunities and investor appetite for alternative assets.