India’s private credit market could attract up to $5bn from domestic and international investors over the next two years, according to a report by Bloomberg citing Kotak Alternative Asset Managers.
Srini Sriniwasan, managing director of Kotak Alternate, said on the sidelines of the Bloomberg New Economy Forum that limited bank appetite for infrastructure financing and riskier borrowers is creating opportunities for private lenders. India’s bond market, which predominantly serves higher-rated borrowers, is also driving demand for alternative financing.
He said recent Reserve Bank of India measures to stabilise the rupee could encourage international private credit investment by reducing currency volatility and improving investor confidence.
The measures include a special facility to meet oil companies’ dollar demand and a requirement for banks to deposit cash with the central bank for certain foreign exchange transactions. The rupee had gained nearly 2% during the week.
India’s private credit market grew 35% year on year to $12.4bn in 2025, according to EY data cited in the report.
Sriniwasan said differences in financing structures provided some insulation from pressures affecting global private credit markets. International managers have restricted investor withdrawals this year amid concerns over asset quality and exposure to software businesses facing disruption from artificial intelligence.
Separately, Kotak Alternate is seeking up to $300m for its first domestic real estate fund in two decades, targeting rupee financing. The fund will invest through both equity and debt across offices, retail and other property segments, including student accommodation.
