The private credit landscape in India is gearing up for a significant boom, with assets managed by alternative investment funds (AIFs) expected to reach an impressive $60-$70 billion by 2028, a fourfold increase from $15 billion in 2022.
A joint report by Praxis Global Alliance and Indian Venture and Alternate Capital Association (IVCA) highlights a surge in investments, with $5.1 billion deployed across 63 deals in the first half of 2023, constituting 16% of total alternative investments.
This substantial growth is further highlighted by the registration of 55 new private credit AIFs in the past five years, contributing to a 140% increase in the average deal size. Notably, H1 2023 witnessed 12 deals exceeding $100 million, compared to 15 in the whole of 2022, promising to make 2023 a standout year for Indian private credit investments.
Fueling this growth is the regulatory landscape, with Reserve Bank of India regulations leading to a reduction in credit deployment by Indian banks. Private credit funds have seized this opportunity, tapping into an opportune landscape.
Despite regulatory challenges, private credit is emerging as a key player in financing large projects and offering flexible solutions in India's dynamic financial landscape.
Reinforcing the vital role of private credit in India's financial ecosystem are prominent players like KKR, Piramal Alternatives, Kotak Alternate Asset Managers, Edelweiss Alternatives, and Oak Tree Capital Management, which continue to shape India's evolving private credit landscape.