The Indian equity market has significantly outperformed, rallying over 150% since the Covid lows, attracting global investors. As equity valuations rise, private credit is gaining attention. This involves lending by asset management companies to riskier borrowers, typically through Alternate Investment Funds (AIFs). Private credit investments in India surpassed $10 billion in 2024, up from $600 million in 2010. Factors driving this growth include the Insolvency and Bankruptcy Code, a funding vacuum post-2018 NBFC crisis, government infrastructure initiatives, and increased domestic investor sophistication. The sector’s potential is further enhanced by lighter regulation and improved product availability, making private credit a promising investment avenue.

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