Cerberus eyes private debt growth in India as shadow banks retreat

By Saikat Das
 

Cerberus Capital Management LP plans to expand its private credit portfolio in India as local non-bank finance lenders shift their focus from corporate lending to consumer credit. 
 

There is a “significant opportunity set for private credit lenders, both local and international, to pick up a portion of this space,” Indranil Ghosh, managing director and head of pan-Asia special situations, said in an interview. 

India is fast emerging as a big market for private credit activity, as global firms deploy billions, lured by the fastest-growing major economy. The $1.7 trillion global private credit market has become a serious rival to mainstream lending, attracting investors by offering higher returns. 

“With the global geopolitical and economic complexity in today’s day and age, India is positioned as a stable landing spot for long-term investment,” Ghosh said. “We see India as one of the most attractive destinations for private credit investors from an opportunity size and quality standpoint.”

India’s shadow banks have come under pressure in recent months as regulators imposed restrictions on the likes of JM Financial Ltd. and IIFL Finance Ltd. 

India’s private credit assets under management may expand by 1-1.2 per centof the gross domestic product by 2028 from 0.4 per centin 2022, according to a private credit report by analytics firm Praxis Global Alliance and Indian Venture and Alternate Capital Association. 

“Our India business should grow more than last year as the Indian market is seeing the recent emergence of a large number of local private credit managers who raise capital from Indian high net worth individuals,” Ghosh said. 

Real estate, manufacturing and financial services will continue to tap private credit for their capital needs, Ghosh added.