The private credit market in India is very small compared to the rest of the world, with estimated assets that are managed from $ 25-30 billion from March-end | Photocredit: Prakash Singh
Private credit in India is ready for strong growth powered by regulatory restrictions, infrastructure financing and acquisition of stressed assets under IBC, according to the report of S&P Global India Research, India forward horizon shifting.
Private credit fulfilled a structural emptiness that was created by non-bank financial companies that withdraw from a needy lending in the real estate sector.
The influence of private credit funds increases rapidly in India, in addition to their ability to achieve disadvantaged borrowers, because of their ability to structure solutions for unique financing needs and irregular cash flows of companies. Banks and financing companies avoid these transactions due to a higher risk or legal restrictions, according to the report.
Geeta Chugh, director, sector leader, ratings of financial institutions, S&P Global, said that the private credit market in India is very small compared to the rest of the world, with estimated assets under managed by $ 25-30 billion from the end of March, which is approximately 0.6 percent of the total corporate GDP and 1.6 percent.
Large ticket deals
The exact measurements of private credit are hard to find, she said. Local experts in the industry estimate the issue of the debt last year at around $ 8-10 billion, and these levels have already been crossed in the first half of this tax because of various deals with large ticket.
In recent years, many of these transactions in the sectors of the infrastructure, real estate, energy and renewable sectors, which offered attractive possibilities to private credit investors.
In the period after the Onselsvie and the 2016 bankruptcy code, there were many prominent examples of transactions in which private credit has been introduced to provide financing. Vedanta Resources raised $ 1.25 billion in private credit in 2023 to help a restructuring of $ 3 billion bonds, using $ 800 million in advance to protect permission from the bond holder in the midst of liquidity stress.
Worldwide and domestic investors are attracted by the private credit market in India, where the revenues usually vary from 14 percent to 22 percent, which is considerably higher than the average return of 8-10 percent for banks and 10-13 percent for financial companies.
“We expect that foreign investments accelerate the growth of private credit in India, despite the complexity of navigating by local regulations,” the report said.
Risker borrowers
Private credit often includes riskier borrowers than traditional lenders. The lack of disclosure and price discovery mechanisms complicates the risk assessment, especially during periods of volatility.
In some transactions, the report said that enforceability can be a challenge. The private credit financing of Shapoorji Pallonji Group, for example, is said to be supported by several colland elements, including a valuable interest in non -called Tata Sons. Tata Sons’ Association, however, prohibit the transfer of interest. Private credit accepted the collateral at a steep rate of around 20 percent.
Published on September 17, 2025
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