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The Tax Publishers Banking and Financial Sector--Future Outlook India's Private Credit Market Poised for Growth CS. Raksha Sankhlecha India's private credit market continues its upward trajectory, reaching US$9.2 billion in 2024, fueled by larger deals and strong domestic investor participation. Despite increasing competition and regulatory challenges, the sector remains resilient, with growth driven by real estate, consumer durables, and financial services. As market dynamics evolve, fund managers remain optimistic about long-term opportunities, even as lending standards face pressure. 1. Overview In FY25, India's banking sector presents a mixed outlook. While public sector banks demonstrate strong profitability and improved asset quality, wholesale lending growth is slowing due to stricter regulations and concerns over unsecured loan quality. Private credit investments in India surged to US$9.2 billion across 163 deals in CY2024, driven by larger transactions and greater domestic investor participation. Competition intensified with an increase in Alternative Investment Fund (AIF) registrations, larger fundraises, and renewed activity from Non-Banking Financial Companies (NBFCs) and global banks. This growing interest from domestic investors has further strengthened the availability of funds. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

Banking and Financial Sector--Future Outlook

India's Private Credit Market Poised for Growth

CS. Raksha Sankhlecha

India's private credit market continues its upward trajectory, reaching US$9.2 billion in 2024, fueled by larger deals and strong domestic investor participation. Despite increasing competition and regulatory challenges, the sector remains resilient, with growth driven by real estate, consumer durables, and financial services. As market dynamics evolve, fund managers remain optimistic about long-term opportunities, even as lending standards face pressure.

1. Overview

In FY25, India's banking sector presents a mixed outlook. While public sector banks demonstrate strong profitability and improved asset quality, wholesale lending growth is slowing due to stricter regulations and concerns over unsecured loan quality.

Private credit investments in India surged to US$9.2 billion across 163 deals in CY2024, driven by larger transactions and greater domestic investor participation. Competition intensified with an increase in Alternative Investment Fund (AIF) registrations, larger fundraises, and renewed activity from Non-Banking Financial Companies (NBFCs) and global banks. This growing interest from domestic investors has further strengthened the availability of funds.