India's private debt market to top US$ 18 billion in 2024 as economy grows: Report

India’s private debt market is projected to exceed US$ 18 billion in assets under management (AUM) by the end of 2024, according to a report by Preqin, an investment data company. The market's expansion is driven by businesses increasingly seeking flexible financing options to support growth, particularly in sectors where traditional lending may fall short. India-focused private debt AUM rose from US$ 14 billion in 2022 to nearly US$ 18 billion in 2023, representing a substantial 29% increase. This growth reinforces India’s status as a regional leader in private debt, outpacing other markets in the Asia Pacific. The shift toward private debt has been facilitated by regulatory reforms, such as the Insolvency and Bankruptcy Code, which have bolstered investor confidence.

While private debt is the fastest-growing asset class, venture capital (VC) continues to dominate India’s private capital landscape, with VC AUM approaching US$ 45 billion in 2023, accounting for 36% of all India-focused private capital AUM. India’s robust economic growth and favourable demographics have further strengthened private capital, resulting in 560 deals exceeding US$ 6 billion in the first half of 2024. Private equity in the country remains resilient, benefiting from strong public markets and consistent fundraising activities. Exit volumes have remained steady, with fundraising figures for 2024 on track to surpass those of the previous year. By June 2024, more than US$ 1 billion had been raised, compared to less than US$ 2 billion in 2023. According to Preqin data, private equity exits volumes in India reached 85 in 2023 and 46 by mid-2024.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.