Private credit deal value is expected to rise about 35% year-on-year to nearly $13 billion in 2025, but the growth is largely skewed by a single large transaction by the Shapoorji Pallonji (SP) Group, with underlying market expansion remaining muted once that deal is excluded.
The market closed 2024 with deals worth $9.63 billion, while 2025 volumes have been boosted by a $3.14 billion SP Group refinancing in the first half, which alone accounted for about 35% of H1 volumes. Adjusting for this transaction, total deal value for the year stands at around $9.86 billion, implying growth of just about 2% over last year.
First half of 2025
The first half of 2025 saw deals worth about $9 billion, supported by a handful of large-ticket transactions, while activity slowed sharply in the second half amid fewer closures. “Based on deals announced and in the pipeline, we expect overall private credit volumes in 2025 to be around $13 billion, though the final number will depend on closures in December,” Vishal Bansal, partner, debt and special situations at EY India, said.
Private credit volumes fell 74% quarter-on-quarter to $1.82 billion in the third quarter of 2025 after a record second quarter, though they were up 20.2% year-on-year, according to Octus. For the first nine months of 2025, volumes totalled $11.5 billion across 166 deals, compared with $7.7 billion from 150 deals in the same period last year.
Large refinancings continued to prop up headline numbers. In August, GMR Airports privately placed $674 million of non-convertible debentures (NCD) to refinance existing debt at a lower cost, while GMR Energy issued $183 million of five-year senior secured NCDs to partly repay a loan from Varde Partners. Earlier in the year, apart from the SP Group transaction, Keppel Credit, BlackRock and Varde Partners together lent $650 million to the founders of Greenko Energy, while KKR provided $600 million in debt financing to the Manipal Group.
Deal flow in the mid-market, however, has moderated. “Overall deal activity appears to have slowed, especially in the mid-market, with several recent transactions focused on refinancing existing debt,” Yeshpal Singh, partner, deals at PwC India, said. He attributed part of the slowdown to heightened activity in primary equity markets, which has met financing needs for several companies and promoters.
While transaction volumes have eased in the second half, investors are increasingly comfortable with larger ticket sizes and syndicated structures. “Large deals are episodic, but those completed this year have given confidence to global investors that large transactions can be executed in India,” Ankur Jain, managing director, private credit strategies at InCred Alternative Investments, said.
Energy and infrastructure remain the key demand drivers for private credit. Renewable energy, waste management, smart meters, defence-linked manufacturing and allied infrastructure continue to see strong interest. “Manufacturing and core industrials are also increasingly turning to private credit to support expansion,” Kapil Singhal, managing partner, private credit at True North, said.
What did Vivek Iyer say?
Vivek Iyer, partner, financial services risk advisory at Grant Thornton Bharat, said demand will rise in specialised areas such as infrastructure, climate and energy, given the scale of capital required and the sector expertise of private credit investors. Singhal added that performing credit could see strong medium-term growth, while special situations and distressed deals are likely to remain subdued amid economic strength, with real estate-focused strategies expected to pick up.
Use of funds data show a continued tilt towards balance-sheet repair and ownership consolidation. In the third quarter, 56% of private credit was used to settle existing debt, followed by M&A-related uses at 17.4%, according to Octus. Despite limited large corporate M&A, promoter-level transactions for stake consolidation, pre-IPO financing and private equity exits have remained active. The Greenko Energy deal, for instance, funded the purchase of Orix Group’s 20% stake.
“Acquisition financing and stake consolidation continue to be the predominant contributors to deal flow in high-growth sectors,” Raghunath T, senior portfolio manager at Vivriti Asset Management, said. He added that refinancing of prior high-yield debt and last-mile capex financing remain active themes, though pricing compression is emerging in some transactions as more capital enters the segment.