HOME > MARKETS > ECONOMY NEWS
  ECONOMY NEWS
ECONOMY
India's private credit market doubles to $25 billion in AUM over past 5 years: Moody's
Jul-03-2026

Moody's ratings in its latest report has said that India's private credit market has doubled in size over the past five years, reaching around $25 billion in assets under management (AUM) by the end of 2025, with annual transaction volumes exceeding $11 billion. The agency expects the market to continue expanding as financing demand rises alongside India's strong economic growth. 

However, the report said the Reserve Bank of India's (RBI) new norms permitting banks to finance strategic acquisitions are likely to intensify competition in a segment historically dominated by alternative capital. It said while the revised regulations may benefit borrowers by lowering costs for financing and increasing its availability, they could compress yields and reduce deal flows for private credit providers for acquisition financing. Effective July 1, the RBI has, for the first time, allowed banks to fund strategic acquisitions of equity shares and compulsorily convertible debentures, subject to certain conditions.

Moody's said India's private credit market has expanded rapidly over the past five years, evolving from a source of financing primarily for distressed companies to a provider of credit for a wider mix of financially stable businesses. Although still relatively small compared to global markets, it believes the private credit market has substantial growth potential, supported by expanding financing needs and the country's robust macroeconomic momentum. It noted that real estate accounts for nearly 40 per cent of the market's total value, followed by infrastructure and utilities. It added that financing led by promoters across various sectors--often for refinancing, liability management or stake acquisitions--is another key part of the private credit market in India. 


  RELATED NEWS >>