High demand for private credit from the real estate sector

There is a huge demand for private capital and private credit of around ₹30,000 crore in the Indian real estate sector, says Karthik Athreya, who recently took over as Managing Director of Sundaram Alternates Assets Ltd, a wholly owned subsidiary of Sundaram Finance Ltd.

This appetite for private capital is largely due to the RBI appropriately maintaining strict limits on bank lending to real estate to prevent asset bubbles and subprime risks.

This “compelling opportunity” will remain for another decade, Athreya said business line recently.

Sundaram Alternates, which started its innings with its first real estate loan fund in 2017 and has since raised ₹9,000 crore, launched RE Credit Fund V in October. “Within just a month, we have made commitments of over ₹500 crore,” Athreya said, noting that this underlined investor confidence in the company.

Since 2017, Sundaram Alternates has completed 76 deals. “Our real estate credit has not lost any capital due to demonetisation, RERA and GST shakeouts, the NBFC crisis in 2018 and the two Covid years,” said Athreya, who was earlier Head of Fund Strategy (Private Credit).

He noted that there are a number of regulatory and commercial arbitrage opportunities available for the AIF Cat II credit asset class. These include early stage financing, acquisitions of other financiers, last mile financing, acquisitions, promoter financing and resolving cash flow mismatches. In these regulatory arbitrage situations, private credit funds can charge premiums for cash, especially in sectors like real estate, he said.

Each of these opportunities is enormous, with a scale of several billion dollars from a capital demand perspective. This is also a reason for the AIF Cat II category to reach capital commitments of over ₹10 lakh crores in just over a decade, Athreya points out.

Published on November 24, 2025