Preqin, an investment data business, predicted that by the end of 2024, the assets under management (AUM) of India's private loan market will exceed $18 billion. The industry is growing as more companies, particularly in industries where standard finance might not be adequate, look to flexible financing solutions to support their expansion.
Private debt AUM with a focus on India increased by 29% from $14 billion in 2022 to about $18 billion in the following year. According to the research, the rise solidifies India's standing as the region's leader in private debt, surpassing markets in Asia Pacific.
The implementation of regulatory changes like the Insolvency and Bankruptcy Code to boost investor confidence has contributed to this move to private debt.
Even though private debt is the asset class with the greatest rate of growth, venture capital (VC) still controls the majority of private capital in India. AUM for venture capital firms approached $45 billion in 2023, making up 36% of all AUM for private capital with an emphasis on India.
Due to the nation's expanding economy and advantageous demographics, private money has been attracted, resulting in 560 agreements totaling more than USD 6 billion in the first half of 2024.
According to the research, private equity in the nation is still strong and benefits from stable funding and active public markets. The amount of money raised for 2024 is expected to surpass that of the previous year, while exit volumes have remained stable. By June 2024, over $1 billion had been raised, as opposed to less than USD 2 billion in 2023.
