'India's private credit market primed for sustained growth'

India's private credit market, which has doubled over the past five years to about $25 billion in assets under management at the end of 2025, is set for sustained growth as rising corporate financing needs and constraints on traditional lenders drive demand for alternative capital, Moody's Ratings said.

Maintaining its recent growth trajectory would take the market to about $50 billion by 2030, the ratings agency said. However, new Reserve Bank of India rules allowing banks to finance acquisitions could intensify competition in a segment long dominated by alternative capital.

"Private credit in India is increasingly becoming a popular alternative to traditional loans," Moody's said, adding that credit demand remains strong, driven by infrastructure development in a relatively stable macroeconomic environment.


The segment is evolving into an established source of funding for businesses rather than merely filling financing gaps.

Moody's said the investor base for India-focused private credit funds is diversified and will continue to broaden. "Private credit in India appeals to investors, especially those who target long-term opportunities and can underwrite idiosyncratic risks, because it offers attractive returns to compensate for high risks," the report said.

Private credit funds in India raise capital from global and domestic asset managers, sovereign and quasi-sovereign investors, family offices and high-net-worth individuals.

Moody's said borrowing by real estate and infrastructure companies, along with promoter financing across sectors, will remain the main drivers of the private credit market as the pool of available funds expands.

Most private credit transactions are currently smaller than $100 million, while multibillion-dollar deals remain sporadic and are largely used for refinancing. However, the RBI's acquisition financing guidelines, which took effect in July 2026, are expected to increase competition in a market historically dominated by alternative capital.

While the rules could lower borrowing costs and improve access to financing for companies, they may also compress yields and reduce acquisition financing deal flow for private credit providers, the report said.

Real estate accounts for about 40% of India's private credit market, with infrastructure the next-largest segment. Promoter financing remains another key pillar, Moody's said.

The ratings agency cited GMR Group's nearly $1 billion fundraising from private credit investors, the Adani Group's $750 million bond issuance, and Apollo-managed funds' fully subscribed $500 million investment in senior secured notes backed by transmission assets of Adani Energy Solutions as evidence of growing appetite for large infrastructure financings.

Promoter financing for refinancing, liability management and stake acquisitions remains another key segment of the market.

Moody's said the Shapoorji Pallonji Group's ₹28,600 crore financing, backed by its 9.18% stake in Tata Sons and real estate assets, was the largest private credit transaction.