Booming Indian private credit sector rakes in a historical $9 billion in investments during the first half of the year.
Private Credit Market Booms in India, Reaching Record Highs
In an unprecedented surge, India's private credit market witnessed a significant boost in the first half of 2025, with a total investment of $9 billion - a 53% jump from the previous year. This growth was driven by a combination of factors, including refinancing deals by major conglomerates and increased participation from global and domestic funds.
EY India's partner, Vishal Bansal, reported a surge in deal activity in the first half of 2025, with the surge primarily led by a record-breaking transaction by the SP Group. The infrastructure sector received the highest allocation from private credit funds, followed closely by real estate and healthcare.
Major conglomerates such as Adani Group, Shapoorji Pallonji, and GMR Infra Enterprises secured substantial funds for refinancing, with Adani Group securing $750 million and Shapoorji Pallonji raising an impressive $3.1 billion. GMR Infra Enterprises, on the other hand, obtained $733 million to refinance its existing debt.
The retreat of traditional banks, particularly public sector banks and NBFCs, has left funding gaps that private credit funds are eager to fill, particularly in structured and event-driven opportunities. Global funds have regained dominance, focusing on complex and large-ticket deals, while domestic funds have targeted mid-market and opportunistic deals.
Stable interest rate expectations have supported deal flow and investor confidence, with approximately 17% of the capital raised being allocated to growth capital, capacity expansion, and strategic acquisitions. This signals a cautious revival in business confidence.
EY's survey data indicates a growing investor appetite, with fund managers targeting deals offering internal rates of return (IRR) ranging between 12%–24%. There is a bullish outlook on real estate, manufacturing, and energy sectors, with strong investor interest remaining in the real estate sector.
In conclusion, the private credit market in India has surged due to strong demand from sectors needing refinancing and capital, combined with active participation by global and domestic funds attracted by stable macroeconomic conditions and strong returns.
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