Private Credit Deals To Touch $10bn In 2024: Report
Major deals were in real estate, infra and healthcare sectors in the first half of the year
With maturing of the system, there is a subtle shift towards performing credit deals in India with funds increasingly engaging in sub-18 per cent Internal Rate of Return transactions, the report said
Private credit deployments are likely to surpass the $10 billion mark in 2024, a report by a consultancy firm has said.
The January-June period saw private credit transactions of over $six billion in 96 deals, while the last two-and-a-half years have seen over $20 billion being deployed in the emerging alternative serving the credit needs of Indian companies.
Major deals were witnessed across real estate, infrastructure and healthcare sectors in the first half of the year, the report by EY said. Domestic funds are gaining traction and market share in the private credit space is leveraging local expertise, it said.
The first half of the year saw Reliance Logistics and Warehousing, Vedanta Semiconductors, and Matrix Pharma collectively raising approximately $1.3 billion, while real estate sector continued to be a focal point with borrowers such as Prestige Group, Puravankara Group, Kalpataru Group, and Shapoorji Group being active. The firm's partner Bharat Gupta said private credit investments are at an all-time high, driven largely by growth-oriented strategies.
"The outlook remains promising, though thorough due diligence and effective deal oversight are crucial to maximizing returns and managing potential risks," Gupta added.
With maturing of the system, there is a subtle shift towards performing credit deals in India with funds increasingly engaging in sub-18 per cent Internal Rate of Return transactions, the report said. In the high-yield segment, mergers and acquisitions/buyout deals, and bridge-to-initial public offering transactions have gained traction within private credit funding, it said.
High-net-worth investors and family offices are increasingly participating in private credit as a key asset class, boosting the popularity of domestic funds, it said.