Private credit 2.0 expands beyond traditional uses, set for growth in India

Private credit solves two gaps in the market: It helps where the banking system is unable to and offers bespoke solutions to corporate borrowers' specific needs

Private credit investments in India were close to $10 billion in FY24; it is projected that total assets under management in this space will touch $60-70 billion by 2028, according to an EY report. Such credit has historically been driven by global capital investing in non-convertible debentures via the foreign portfolio investment route. However, a large part of its growth is now fuelled by domestic funds, which are mostly structured as Category-II alternative investment funds (AIF) registered with the Securities and Exchange Board of India and target a mix of offshore and domestic capital. High-net worth individuals and family wealth