India's Private Credit Market Crossed $3.5 Billion. What Changed for Founders

India's private credit market recorded $3.5 billion in the first half of 2026, across more than 100 deals above $10 million, according to EY's report published on 20 August 2026. Domestic funds supplied 74 percent of it. The detail that matters most is that four of the five largest deals were refinancing or acquisitions, not rescue.

Private credit in India used to mean the money you took when the bank said no. That is over. The money is now largely Indian, the purpose is growth, and the question for a founder has changed. It is no longer whether to use private credit. It is when.

Key takeaways

• Private credit deployed $3.5 billion in India in H1 2026, roughly flat with the previous half and well below H1 2025. The headline is not a surge in size. It is a change in who lends and what for.
• Domestic funds now supply 74 percent of deal value and about 79 percent of deal volume. The market is led from inside India, not by global funds.
• Deals are getting smaller. The $10 million to $60 million band rose to 61 percent of value from 51 percent, while deals above $120 million fell to 18 percent from 27 percent.
• The main use cases are refinancing, acquisition and growth, not rescue. Real estate took the largest share at 35 percent, and also carries the highest perceived default risk.

What the EY numbers actually say

Read alone, $3.5 billion looks like momentum. Read in series, it is steadier and more interesting than that.

The same EY franchise recorded $9.0 billion in H1 2025 and $3.4 billion in H2 2025, for a record calendar year of $12.4 billion, up about 35 percent on the prior year. So H1 2026, at $3.5 billion, is close to flat against the previous half and down about 61 percent against H1 2025.

That fall needs one honest correction, because the raw percentage misleads. H1 2025 was inflated by a single transaction, the Shapoorji Pallonji group's $3.4 billion raise in May 2025, still the largest private credit deal in India's history. That one deal was more than a third of the entire half. Strip it out and H1 2025 was closer to $5.6 billion. The market did not collapse in a year. It stopped printing mega-deals, and the activity moved down the size curve.

Figure 1. One mega-deal made H1 2025 look like a peak. H1 2026 is flat with the prior half.

This is the point the size number hides. What changed in H1 2026 is not how much was lent. It is who lent it, how large the cheques were, and what the money was for.

Who is lending now

Domestic funds supplied 74 percent of deal value and roughly 79 percent of deal volume in H1 2026. Foreign funds accounted for the remaining 26 percent of value and about 21 percent of volume.

Figure 2. Domestic funds supplied roughly three quarters of value and four fifths of deals.

That is a structural shift, not a quarter's noise. For most of the last decade, India's large private credit cheques came from global funds parking capital in a high-yield emerging market. Domestic pools, rupee-denominated alternative investment funds, wealth platforms, and credit-focused NBFCs, have now taken the lead on both count and value.

For a founder, a domestic-led market is a materially different thing to raise from. The lender prices in rupees, understands Indian collections and enforcement, and does not need to hedge currency into the cost of capital. Decisions sit closer, and the diligence is run by people who have underwritten Indian revenue before. The capital is not just larger in aggregate. It is easier to reach.

What the money is being used for

The clearest signal in the report is the purpose behind the biggest deals. These were the five largest private credit transactions in H1 2026.

Company	Size	Purpose
Kalpataru Properties	$176 million	Refinancing
HyFun Foods Group	$156 million	Refinancing and working capital
GMR Group	$150 million	Group funding
Manipal Group	$124 million	Refinancing
Inspira Group, Lenexis Foodworks	$113 million	Acquisition financing

Four of the five were refinancing or acquisition. None reads as a distressed rescue. This is the substance behind the claim that private credit has moved from a lender of last resort to a working part of the growth balance sheet. Companies are using it to retire more expensive debt, to fund working capital through a growth phase, and to pay for acquisitions that a bank would take months to approve.

That is the shift founders should register. Private credit is now competing with the bank term loan and the equity round, not sitting below them.

Why deals are getting smaller

The size mix moved decisively toward the middle. Deals of $10 million to $60 million rose to 61 percent of total value in H1 2026, from 51 percent in H2 2025. Deals above $120 million fell to 18 percent, from 27 percent.

Figure 3. Mid-sized lending rose as jumbo deals shrank, as a share of total value.

In plain terms, the market did more medium-sized lending and less jumbo lending. A mid-market company raising the rupee equivalent of $15 million to $50 million is now the centre of gravity of India's private credit market, not the exception at its edge. That is exactly the band where a growth-stage Indian company actually operates.

Where it is going, and where the risk sits

Real estate took the largest share of deployment at 35 percent of value, followed by healthcare at about 13 percent and food and beverage at about 12 percent. Food and beverage is the notable mover, up from close to 1 percent in the prior half.

Real estate is also the report's clearest warning. It is both the largest destination for private credit and the sector investors flag as carrying the highest perceived default risk, ahead of roads, energy, metals and manufacturing. That is the paradox a founder should read carefully. The sector attracting the most private credit is also the one where lenders expect the most stress. Concentration and risk are pointing at the same place.

What this means for founders

Three practical conclusions follow, and none of them is that private credit is free.

Access has widened. A domestic-led, mid-market-weighted market is structurally easier for a growth-stage Indian company to raise from than a foreign-led, mega-deal market was. The cheque sizes now match the need.

Price has not fallen. In the same survey, about 67 percent of investors said they want internal rates of return above 18 percent, and a further third target 12 to 18 percent. Private credit is patient and flexible, but it is not cheap money. The correct comparison is not against a bank rate. It is against the cost of selling equity to fund the same thing. For a profitable company, structured debt at a mid-teens to high-teens cost is often far cheaper than diluting at a low valuation. For a pre-profit company burning cash, it usually is not.

Purpose decides fit. The deals winning capital are refinancing, acquisition, working capital and expansion, uses with a clear repayment path. Private credit rewards a specific, bounded, repayable need. It punishes an open-ended one.

Where Debtsify sits, and where it does not

One measurement detail matters here, and it works in a mid-market founder's favour. EY counts only deals above $10 million. The entire $3.5 billion is the visible top of the market. Debtsify's range, ₹5 crore to ₹100 crore, tops out near $12 million and mostly sits below EY's line. The segment we work in is not captured in the headline figure at all, and it is moving for the same reasons the measured market is: domestic capital, smaller cheques, faster decisions.

We would also decline much of what the report celebrates. We do not chase the highest-risk deployment. A speculative real estate position, the sector the report itself flags for default risk, is not our book. We underwrite revenue quality, gross margin, customer concentration and the reliability of collections, not asset appreciation or the next fundraising round. Where a company's case is an equity case, we say so.

What the EY data confirms is the shape of the demand, not a reason to lend against anything. Indian companies increasingly want capital that is fast, non-dilutive and structured to a specific purpose. That is the need. The discipline is in which specific needs are actually repayable.

What we can say from our own desk

Three things we see directly.

Speed is the point. Where a facility is arranged, it moves in 48 to 72 hours, with funds typically reaching the company's primary treasury by Day 4. The acquisition and refinancing deals driving this market share one feature. They are time-sensitive.

The most common reason a company is declined is that its revenue is too small or too unpredictable to service repayment in a flat case. A market can be growing and a specific company can still be a decline. Both are true at once.

The companies this suits sit across manufacturing and industrials, D2C and consumer, SaaS and technology, and services. What they share is not a sector. It is revenue you can underwrite.

One number we do not publish, because we will not estimate it. Out of the last 100 enquiries we received, the count that resulted in a funded facility depends on the revenue quality behind them, and we would rather leave the figure open than print one we cannot stand behind.

Frequently asked questions

How big is India's private credit market in 2026?

EY recorded $3.5 billion of private credit investment in the first half of 2026, across more than 100 deals above $10 million. That follows a record calendar year 2025 of about $12.4 billion. The H1 2026 figure is roughly flat with the prior half and below the mega-deal-inflated $9.0 billion of H1 2025.

Why did private credit fall from H1 2025?

Mostly because of one deal. H1 2025 included the Shapoorji Pallonji group's $3.4 billion raise, the largest in India's history, worth more than a third of that half. Without it, the year-on-year fall is far smaller. The market moved from a few mega-deals toward more mid-sized lending, rather than contracting.

Who provides private credit in India now?

Domestic funds do. In H1 2026 they supplied 74 percent of deal value and about 79 percent of deal volume, with foreign funds providing the rest. Rupee-denominated alternative investment funds, wealth platforms and credit-focused institutions now lead a market that global funds once dominated.

What is private credit used for?

Increasingly for growth, not rescue. Four of the five largest H1 2026 deals were refinancing or acquisition financing, including Kalpataru, HyFun Foods, Manipal and Inspira. Companies use private credit to retire costlier debt, fund working capital and pay for acquisitions faster than a bank term loan allows.

Is private credit cheaper than raising equity?

It depends on the company. About 67 percent of investors in EY's survey wanted returns above 18 percent, so private credit is not cheap. For a profitable company, that cost is often lower than diluting at a weak valuation. For a pre-profit company burning cash, it usually is not. The comparison is cost of debt against cost of dilution.

About Debtsify

Debtsify is a private structured-credit and bridge-financing partner for high-growth Indian companies. It arranges ₹5 Cr to ₹100 Cr in 48 to 72 hours, 100% non-dilutive, with no equity, warrants, board seats, or collateral. It is not a bank, an NBFC-marketplace, or a loan aggregator. It is a capital partner.

This article is for information only. It is not investment, legal or financial advice, and it is not an offer of any facility. Market figures are drawn from EY's India private credit reports and named press sources, are attributed with dates in the source notes, and should be verified against the primary reports before any decision. Figures, rates and outcomes change.