Onwards and upwards: A positive outlook for private credit in India

India's private debt market remains resilient, with sustained demand for structured credit, supporting business growth across sectors.

In brief

• Private credit investments in India stood at US$3.5 billion in H1 2026, remaining in line with H2 2025 despite a challenging global environment.
• Real estate continued to lead private credit deployment, followed by healthcare and Food & Beverage.
• The ticket-size mix shifted in H1 2026, with mid-market deals accounting for nearly 61% of total deal value, while deals exceeding US$120 million contributed 18%.
• The IBC Amendment Act, 2026 introduced measures aimed at expediting insolvency proceedings, enhancing creditor rights and improving transaction certainty.

H1 2026 saw challenges in the global macroeconomic environment, marked by geopolitical tensions, commodity price volatility, and uncertainty around global trade and policy developments, which weighed on global investment sentiment. Against this backdrop, India continued to benefit from strong domestic fundamentals, including healthy consumer demand, infrastructure spending and improving investment activity. India’s credit ecosystem remained robust, underpinned by strong banking sector fundamentals, improving asset quality, broad-based credit expansion, resilient NBFC lending and deepening debt capital markets. These factors continued to support the growth of the private credit market in India and reinforced the attractiveness of alternative investment funds and other structured credit providers.

Private credit deal flow in India for H1 2026

In H1 2026, based on deals tracked by EY, India’s private credit investments totaled US$3.5 billion, broadly in line with H2 2025. H1 2026 recorded 102 private credit transactions above US$10 million, compared with 87 transactions in H2 2025. Mid-market deals remained the key driver of activity, with transactions in the US$10 million to US$60 million range accounting for 87% of total deal count and 61% of total deal value. This reflects the growing scale and maturity of India's private credit market, with transaction activity increasingly distributed across a broad spectrum of mid-sized borrowers and sectors. Larger deals over US$120 million accounted for 18% of deal value in H1 2026 vis-à-vis 27% in H2 2025.

From a sector-wise trend in private credit perspective, real estate remained dominant, accounting for 35% (compared with ~42% in H2 2025) of total deal value, followed by healthcare at 13%. The Food & Beverage sector witnessed a notable increase in private credit activity during H1 2026, emerging as the third-largest sector by deal value with a share of 12%, compared with around 1% in H2 2025.

Transaction activity during H1 2026 reflected a continued preference for structured capital and flexible capital solutions. Refinancing remained a major driver of deal flow as companies sought to optimize capital structures and improve financial flexibility. In addition, private credit funds continued to support real estate project financing, HoldCo funding and acquisition financing, underscoring the role of alternative credit as an increasingly important source of flexible capital beyond traditional bank lending.

Domestic funds accounted for 74% of total deal value and approximately 79% of deal count, reflecting the increasing depth and maturity of India's local private credit funds.

Regulatory reforms strengthen the ecosystem

The regulatory landscape continued to evolve positively; the IBC Amendment Act, 2026 introduced measures aimed at accelerating insolvency proceedings, improving creditor protection, strengthening liquidation oversight and enhancing transaction certainty. These developments are expected to further strengthen India's restructuring and special situations framework and support the long-term development of alternative credit markets.

Vishal Bansal, Partner at EY India, has also contributed to this article.

Summary

India's private credit market remained steady in H1 2026, with investments of US$3.5 billion. Deal activity increased to more than 100 transactions above US$10 million, led by real estate, healthcare and Food & Beverage sectors. Refinancing, project funding, HoldCo financing and acquisition financing continued to drive activity across Indian private debt market. India's strong economic fundamentals, healthy credit ecosystem and evolving regulatory framework continued to support private credit activity. Market participants remain optimistic about the medium-term outlook, supported by India's strong economic fundamentals, healthy credit ecosystem and supportive regulatory developments, although competition within the private credit industry is expected to intensify.