India’s private credit market recorded $3.5 billion in deals during the first half of 2026, a 61% drop from the same period last year. This decline is largely due to a high base in 2025 caused by one massive transaction. The market is now stabilizing, with domestic investors funding 74% of deals, signaling a structural shift toward local capital for corporate growth.
India's private credit market reported a total deal value of $3.5 billion across 102 transactions in the first half of 2026. While this represents a 61% decline from the $9 billion recorded in the first half of 2025, financial analysts suggest this figure reflects a market normalization rather than a contraction in demand. The exceptionally high base in 2025 was primarily driven by a single large-scale refinancing transaction by the Shapoorji Group, which inflated that period’s numbers significantly.
When compared to the second half of 2025, the market actually showed stability, maintaining a similar level of deal flow. This suggests that while record-breaking mega-deals have slowed, mid-market lending activity continues to function as a key source of financing for Indian companies.
The Rise of Domestic Capital
A notable shift in the funding landscape is the increasing dominance of domestic investors. In the first half of 2026, domestic capital providers—including local NBFCs, Alternative Investment Funds (AIFs), and family offices—accounted for 74% of the total deal value. This is a sharp rise from 36% in the first half of 2025 and 26% in the second half of 2025. This transition indicates that Indian companies are becoming less dependent on volatile global liquidity and are increasingly relying on local financial institutions to meet their debt and working capital requirements.
Sector Trends and Deal Sizes
Real estate continues to be the primary destination for private credit, capturing roughly 35% of the total deal value. Major corporations such as the Kalpataru Group and GMR Group secured significant private credit funding during this period, highlighting the sector's ongoing need for capital to drive infrastructure and development projects.
Beyond real estate, the food and beverage sector has emerged as a growing area of interest, now accounting for 12% of total deal value, up from 1% in the latter half of 2025. HyFun Foods Group was among the notable entities securing funding in this space. The shift in deal sizes also points to a more diversified market, with transactions between $10 million and $40 million now representing nearly half of the total deal value.
Investor Monitorables
While the current shift toward domestic funding provides a buffer against global macroeconomic volatility, investors should remain aware of concentration risks. The heavy reliance of the private credit market on the real estate sector means that any downturn in property demand or pricing could impact the health of these debt portfolios. Additionally, as competition for high-quality borrowers increases among domestic lenders, market participants will track whether this leads to more disciplined lending standards or potential aggressive risk-taking in pursuit of returns. The ability of sectors like food and beverage to maintain this momentum will also be a key indicator of market health in the coming quarters.