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Domestic Capital Fuels India's Private Credit Boom to $3.5 Billion
21 Aug
Summary
- Domestic funds accounted for 74% of private credit deal value.
- Private credit investments reached $3.5 billion in the first half of 2026.
- Real estate was the largest sector at 35% of deal value.
India's private credit market experienced robust activity in the first half of 2026, with investments totaling $3.5 billion across more than 100 transactions exceeding $10 million. Domestic funds were the dominant force, contributing 74% to the total deal value and nearly 79% to transaction volume.
This surge in domestic capital is a significant development for India's private credit landscape. Refinancing, holding-company funding, and acquisition financing were key activities driving investments, which remained comparable to the $3.4 billion seen in the latter half of 2025.
Real estate emerged as the leading sector, capturing 35% of private credit deal value. Healthcare followed at 13%, and the food and beverage sector saw a notable rise to 12%. This growth aligns with increasing demand for corporate financing, as bank credit to large industries and MSMEs has also seen significant expansion.
Looking ahead, private credit is poised to benefit from the ongoing capital expenditure cycle. Sectors like infrastructure, renewables, and energy may become more prominent as capital requirements grow. While global funds are expected to lead in large-ticket deals, domestic funds are increasingly participating through co-investments.
