Global and domestic investors could invest as much as $5 billion into India’s private credit market over the next two years, according to Kotak Alternate Asset Managers Ltd., which manages over $22 billion in assets. The potential inflows underscore the growing role of alternative capital in India, where banks have limited appetite for financing infrastructure and remain selective in lending to riskier borrowers, said Srini Sriniwasan, managing director of Kotak Alternate. Private credit is stepping up in India with innovative structures financing these opportunities and providing growth capital.
A shallow bond market, heavily skewed toward higher-rated borrowers, is further increasing the need for private debt. The Reserve Bank of India’s latest moves to stabilize the rupee could attract global private credit funds as the measures reduce currency volatility, thereby boosting investor confidence. India’s central bank over the weekend introduced measures including a special window to meet oil companies’ dollar demand and announced a new tool requiring banks to set aside cash with the authority for some foreign exchange transactions.
The rupee has gained nearly 2% this week. Sriniwasan said India’s private credit market is also insulated from global worries as the country’s market operates under financing structures different from the rest of the world. The sector expanded 35% to $12.4 billion in 2025 from a year earlier, according to data compiled by consulting firm EY.
Separately, Sriniwasan said Kotak Alternate is raising as much as $300 million for its first domestic real estate fund in two decades to tap rupee financing. The new fund will invest across office, retail, and segments such as student housing, and put capital in both equity and debt asset classes.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing