India Private Credit Market Shifts Towards Mid-Sized Deals as Domestic Funds Gain Ground

India’s private credit market remained resilient during the period, with investments of USD 3.5 billion across more than 100 transactions valued above USD 10 million. The figure was broadly in line with the USD 3.4 billion recorded in the previous six months.

According to EY, transactions worth USD 10 million to USD 60 million accounted for 61 per cent of total deal value in H1 2026. In contrast, deals above USD 120 million accounted for 18 per cent of the value, down from 27 per cent in H2 2025.

The report said the rise in mid-sized deals reflected lenders’ preference for opportunities offering clearer risk-return visibility. Demand was supported by refinancing, holding company funding, acquisition financing and structured capital solutions.

“The growing share of domestic capital is one of the most significant developments in India’s private credit market,” Vishal Bansal, Partner, Debt and Special Situations, EY India, said.

He said domestic funds were increasingly exploring refinancing, acquisition financing and special situations, particularly in the mid-market segment, where demand for structured capital remained strong.

Domestic funds accounted for 74 per cent of total private credit deal value and nearly 79 per cent of deal volume in H1 2026, making them the largest source of capital in the market.

Real estate continued to attract the highest share of private credit, accounting for 35 per cent of total deal value. At the same time, investors identified real estate as the sector with the highest perceived default risk.

Despite the risk perception, demand remained strong for asset-backed opportunities and refinancing transactions in the sector. Real estate activity was mainly driven by refinancing, project funding and structured capital solutions.

EY expects India’s private credit market to remain resilient over the next two to three years, supported by demand for flexible financing for growth, refinancing, special situations and mergers and acquisitions.

“India’s private credit market is entering a new phase of evolution,” Dinkar Venkatasubramanian, Partner and National Leader - Debt and Special Situations, EY India, said.

He added that private credit is increasingly becoming an important part of India’s financing ecosystem.

Going forward, infrastructure and other asset-heavy sectors are expected to become important areas for private credit deployment. Global funds are likely to continue pursuing large transactions, while domestic investors are expected to further strengthen their role in the market.