MUMBAI, Dec. 9 -- India's private-credit market is in the midst of its busiest phase yet, with a wave of domestic and global investment firms rushing in as companies seek faster, more flexible capital than traditional lenders can provide. Over the past 12 to 18 months, firms from DMI Alternatives and Ascertis Credit to Motilal Oswal Alternates, ASK Group, True North, Edelweiss, Multiples Alternate Asset Management, Prabhudas Lilladhar and Vivriti Asset Management have launched new funds, while heavyweights such as Blackstone Group and Bandhan AMC are setting up dedicated platforms. The National Investment and Infrastructure Fund (NIIF) has also announced a $2 billion plan aimed at drawing global capital into the asset class. This surge reflects the rapid evolution of private credit from a niche strategy into one of the most active corners of India's capital markets. Companies across sectors are opting for financing that lets them raise money without giving up equity, while investors-from family offices to private-equity managers-look for steadier yields and faster distributions than equity can offer. The shift is being accelerated by gaps left by banks and non-banking finance companies (NBFCs), regulatory flexibility under the AIF framework, and a growing pool of domestic capital allocating to structured credit. The enthusiasm is backed by numbers. Private-credit deployment hit $9 billion across 79 deals above $10 million in the first half of 2025, a 53% jump from a year earlier, according to an August report by EY. Stable interest-rate expectations and a widening financing gap in infrastructure and real estate helped lift activity. Although banks remain the backbone of India's credit system, private credit funds are increasingly working alongside them, often filling gaps that lenders cannot reach. "Private credit deals are typically customer structured because of the nature of financing, which is bespoke, flexible and often in situations where banks cannot participate (viz. land funding, companies with lower vintage/operational track record, etc)," said Vishal Bansal, partner, Debt & Special Situations, EY. The global private credit market is estimated at over $3 trillion, according to EY, while PwC put India's market at roughly $10 billion in deal size in 2024, with assets under management around $25 billion. Bansal said India faces big financing needs in healthcare, renewables, infrastructure and housing-requirements the banking system alone cannot meet, leaving room for global capital. He emphasized that private credit offers more stable, predictable returns than equity. "While equity delivers higher upside, it also comes with higher risk and longer exit timelines. Private credit, on the other hand, provides steady yields with lower volatility, which helps firms manage overall portfolio performance." He said private credit funds largely operate within the 15-18% internal rate of return (IRR) bracket. Private-equity firms, too, are building credit verticals to complement their sector expertise. Multiples' Rahul Chawla said limited partners already have an established comfort with private credit....