According to a report by Preqin, an investment data company, India’s private debt market will have over $18 billion in assets under management (AUM) by the end of 2024.
The market is expanding as businesses increasingly rely on flexible financing options to drive growth, particularly in sectors where traditional lending may not be sufficient.
India-focused private debt AUM increased by 29% from $14 billion in 2022 to nearly $18 billion a year later. According to the report, India’s growth has solidified its status as a regional leader in private debt, surpassing markets in Asia Pacific.
The introduction of regulatory reforms, such as the Insolvency and Bankruptcy Code, has facilitated this transition to private debt by enhancing investor confidence.
Venture capital (VC) continues to dominate India’s private capital landscape, despite the fact that private debt is the fastest-growing asset class. In 2023, the aggregate assets under management (AUM) of venture capital companies (VCs) exceeded $45 billion, which accounted for 36% of the total AUM of private capital focused on India.
Private capital has been encouraged by the country’s expanding economy and favorable demographics, resulting in 560 transactions totaling over $6 billion during the first half of 2024.
The report also indicates that private equity in the country remains resilient, as it continues to benefit from consistent fundraising and robust public markets. The exit volumes have remained consistent, and the fundraising figures for 2024 are expected to surpass those of the previous year. By June 2024, the amount of funds raised had exceeded $1 billion, as opposed to less than $2 billion in 2023.
According to Preqin data, the number of private equity exits in India reached 85 in 2023 and 46 by mid-2024.
