Globally, the private credit space has already surged past the $2 trillion AUM mark, but India is still in its early innings, with barely $25 billion in assets under management. The underpenetration, coupled with rising confidence in the Indian growth story, is setting the stage for a sharp upsurge in the domestic private credit market, pushing it closer to the mainstream.
For the first half of 2025, the total deployment in private credit touched $9 billion across 79 deals, which marked a 53 percent YoY jump, and roughly 3x compared to H2 2024 levels. According to an expert, the total AUM of domestic private credit can grow between 30-40 percent for the next few years.
Earlier, private credit was seen as a high-yield opportunity for HNIs, family offices, and institutional investors. However, as more borrowers are looking for flexible, tailored credit options, the private credit space is developing into a solutions-driven financing ecosystem, with funds stepping into roles traditionally dominated by banks.
Further, as private capex spurs into action once again, companies hunt for faster, more flexible capital, according to fund managers, private credit will shift from a return-seeking product to an integral part of the corporate financing stack.
Source: Moneycontrol, 1st December 2025
