Preqin has released a report highlighting the rapid growth of India's private debt funds, with assets under management rising from $0.7 billion in 2010 to $17.8 billion by 2023. This marks a significant outperformance compared to other asset classes in India.
According to Preqin, India's private debt market has become a significant component of the private capital sector, achieving a leadership position in the Asia-Pacific (APAC) region with assets under management exceeding those of other markets in 2022. This expansion is primarily driven by the financing needs of mid-sized businesses, which often encounter challenges due to the conservative lending practices of local banks.
Regulatory developments, particularly the introduction of the Insolvency and Bankruptcy Code (IBC), have contributed to enhancing investor confidence by streamlining insolvency procedures and optimizing returns for creditors. Although the pace of new India-focused private debt fund closures has moderated since 2020 in response to global economic uncertainties, Preqin reports that the number of active funds remains significant, with 44 funds currently seeking an aggregate capital target of $10 billion—surpassing other APAC markets.
The growth of private credit in India is influenced by several key factors, including enhanced access to corporate financial data facilitated by advancements in digital infrastructure and a shift in investment preferences among younger investors. However, foreign investors face challenges such as navigating investment restrictions and identifying asset managers with local expertise.
India's economy is rapidly growing, driven by strong GDP growth, favorable demographics, extensive infrastructure investment, and economic reforms, attracting global private capital. According to Preqin reports and data, private capital assets under management have more than tripled over the past 15 years, reaching a record $124.3 billion by the end of 2023.
Preqin was founded in 2003 as a data provider serving over 48,000 clients. It employs 500 researchers and more than 1,500 staff across 15 global offices. The company specializes in delivering data and insights on alternative assets to enhance decision-making within the finance sector.