Private credit market records investments of US$3.4 Billion in H2 2025: EY Private Credit Report

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Private credit in India continues to expand, with US$12.4 billion deployed in CY 2025
Real estate received the highest allocation from private credit funds, followed by healthcare and industrial products, with capex funding and refinancing as key drivers.
EY Private Credit Pulse Survey January 2026: 67% of fund managers remain bullish on private credit over the next 2–5 years despite rising competitive intensity.

18 February 2026 – Private credit investments in India reached US$3.4 billion in H2 2025, up from US$3.3 billion in H2 2024, according to the EY Private Credit Report for H2 2025.

The market demonstrated steady momentum, supported by stable interest rate expectations and structural funding gaps left by banks, particularly in real estate and healthcare sectors. During the period, domestic private credit funds accounted for a larger share of investments compared to global funds, reflecting the deepening of India’s domestic private credit ecosystem.

More than 35% of capital deployed in H2 2025 was allocated towards refinancing, acquisition financing and capital expenditure, indicating sustained demand for both balance-sheet optimization and growth-oriented funding.

Deal value remained concentrated in a limited number of large-sized transactions. While deals exceeding US$100 million represented 9% of total deal count, they accounted for nearly 36% of aggregate deal value. Notable transactions during the period included US$193 million raised by a PharmEasy group entity and US$183 million raised by a Shapoorji Pallonji Group entity for refinancing purposes, as well as US$182 million secured by the GMR Group for refinancing and further investments across group companies.

Dinkar Venkatasubramanian, Partner and Leader, Debt and Special Situations, EY India said, “India’s credit landscape remained resilient through H2 2025, supported by easing financial conditions and strong domestic demand. While Bank and NBFC lending picked up, private credit continued to play a critical role in addressing refinancing needs, complex transactions, and selective capital expenditure funding. Domestic private credit platforms were particularly active in the second half, reflecting growing investor confidence and market sophistication. Private credit is now firmly established as a complementary and long-term pillar of India’s evolving credit ecosystem.”

Vishal Bansal, Partner, Debt and Special Situations, EY India said, “Despite ongoing global uncertainty, India’s private credit market expanded steadily in 2025, supported by strong domestic fundamentals and sustained demand for alternative financing. While deal activity moderated in H2 2025 after a strong first half, CY 2025 closed at US$12.4 billion across 166 transactions, reflecting a 35% year-on-year growth in value. Real estate, healthcare and industrials remained the largest contributors, with refinancing, acquisition financing, and capex funding driving deal flow. A notable shift in H2 2025 was the increasing prominence of domestic private credit managers, highlighting the increasing depth and maturity of India’s private credit ecosystem. This edition also captures emerging trends such as continuation vehicles and leveraged buyouts, as well as insights from the expanded EY Pulse Survey on investor sentiment and rising competition in the market,”

Macroeconomic backdrop

India stands out amid a slowing global economy, supported by easing inflation, policy stability, and resilient domestic demand. The global economy remained resilient through H2 2025, supported by fiscal measures and sustained investment activity, even as elevated uncertainty, high public debt, and financial-market vulnerabilities posed downside risks. Against this backdrop, India’s economy maintained strong momentum, recording real GDP growth of 6.5% in FY25, significantly outperforming global growth trends. Looking ahead, India’s growth outlook remains stable, with FY26 real GDP growth projected at approximately 7.3%, followed by moderation to around 6.4% in FY27, supported by resilient domestic demand, easing inflation, and continued public capital expenditure.

Inflationary pressures eased notably in H2 2025. Consumer Price Index (CPI) inflation moderates sharply at 0.25% in October 2025 before rising modestly to 0.71% in November, reflecting food price normalization and higher fuel inflation, while core services inflation remaining stable.

Optimism for future investment opportunities: EY Private Credit Pulse Survey

The December 2025 EY Private Credit Pulse Survey reveals that 45% of the respondents target Internal Rate of Return (IRR) of 12% to 18% while the remaining 55% target 18% to 24%. While real estate continues to lead deal flow, it is also perceived as the riskiest sector by the fund managers. Looking ahead, nearly 67% of respondents expect private credit activity to remain bullish over the next 2–5 years. In terms of deal volume, 28% of fund managers anticipate private credit investments to exceed US$15 billion in the coming year, while 55% project investments within the US$10–15 billion range. These insights underscore the sustained confidence of fund managers in India’s private credit market and its potential for continued growth and diversification.

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