Kotak forecasts $5bn of inflows into Indian private credit
India’s private credit market could attract up to $5bn from domestic and international investors over the next two years, according to a report by Bloomberg citing Kotak Alternative Asset Managers.
Kotak Alternative Asset Managers predicts that India's private credit market may see up to $5 billion in inflows from domestic and international investors over the next two years, according to a Bloomberg report. Srini Sriniwasan, managing director of Kotak Alternate, stated this during the Bloomberg New Economy Forum, highlighting limited bank interest in infrastructure financing and riskier borrowers as creating opportunities for private lenders.
India's bond market, which mainly serves higher-rated borrowers, is also fueling the demand for alternative financing options. In response to the recent Reserve Bank of India's efforts to stabilize the rupee, Sriniwasan believes international private credit investment could be encouraged by reducing currency volatility and boosting investor confidence.
These measures include a special facility to address oil companies' dollar needs and a requirement for banks to deposit cash with the central bank for certain foreign exchange transactions.
The rupee has gained around 2% in the recent week. In 2025, India's private credit market expanded 35% year on year to $12.4 billion, as per EY data referenced in the Bloomberg report. Sriniwasan mentioned that the distinct financing structures in India offer some protection against the pressures affecting global private credit markets. International managers have limited investor withdrawals this year due to concerns over asset quality and exposure to software companies facing disruption from artificial intelligence.
Additionally, Kotak Alternate is planning to raise up to $300 million for its first domestic real estate fund in two decades. This fund will focus on rupee financing and will invest through both equity and debt across various property segments, such as offices, retail, and student accommodation.
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