India’s private credit market is booming, says Moelis India CEO Manisha Girotra

"India's private credit market is booming," Manisha Girotra, chief executive of Moelis India, told Mint.

Since private credit is more flexible on the cap table, it can be structured to reflect individual risk appetites, she said.

"Banks, especially global ones, are competing very hard to fund mergers and acquisitions, but you will see more private credit come into the picture," Girotra added.

To be sure, compared with the rest of the world, India's private credit market is very small. According to S&P Global, the country's private credit market had estimated assets under management of $25-30 billion as of FY25-end, representing 1.2% of the overall corporate lending sector.

Girotra's bullishness on the private credit market can also be attributed to the fact that in India, private credit yields typically range from 14% to 22%. This is substantially higher than the average yield of 8% to 10% for banks and 10% to 13% for finance companies in India, according to S&P Global's 2025 report.

"These private credit players are offering real, huge flexibility," Girotra said, pointing to the example of Adani Airports Holdings Ltd.

When Adani's Mumbai International Airport first raised private credit in 2021 as a greenfield project, options were limited.

Four years later, as the project neared operation, it refinanced the $750 million debt facility for a second time with private credit lenders led by Apollo-managed funds.

Then, in June 2025, private equity giant KKR & Co. provided $600 million in financing to Ranjan Pai's Manipal group, marking the American firm's largest private credit investment in India. The capital was anchored by KKR's private credit and insurance platforms.

Tough competition

Private credit's competitive pricing has enabled it to establish a foothold in India's longer-term and higher-quality infrastructure assets, Girotra explained.

However, in recent years, competition with other forms of capital has intensified as equity market valuations have provided issuers with a cheaper alternative. Today, borrowers have multiple options for structured credit, like wholesale lenders, mutual funds, and finance companies. ​"Invariably, that has put demand for private credit and its yields under pressure, which in turn has led to an uptick in covenant-lite transactions," the S&P report said.

But Girotra remains bullish on private credit and expects its share of borrowings to rise. "I think you'll see it play a much larger role going forward," she said.

Prior to joining the India arm of New York-based Moelis & Co., Girotra was CEO and country head of UBS in India, where she managed its investment bank, commercial bank, markets, equity research and wealth management divisions. Before that, she was the head of Barclays Bank's north India business.

She highlighted how, over the last few years, investment bankers have noticed heightened competition between private capital and public markets.

"What makes our lives more challenging now is the fact that private capital is competing with public markets. With the number of initial public offerings (IPOs) that happened last year, and the valuation that public markets are offering, private equity [instead of credit] has had to become more competitive."

India's IPO market was one of the hottest global destinations in 2025, with over 350 companies raising more than ₹1.75 trillion. With increased competition between public markets and private equity, Girotra expects some amount of dual-tracking to also play out in the Indian deals ecosystem.

A dual-track process is a strategic path a company follows to raise funds when it is unsure of which way to go.

Girotra cited Manjushree Technopak's example from late 2024, where Advent International sold its portfolio firm to PAG after pursuing a dual-track strategy.

Mint had also reported in February 2025 that ITC had mulled acquiring Orkla India for $1.4 billion, seen as a pivot from the MNC's plans for its India listings.

Renewables, AI And Healthcare Bet

Girotra said that the 2026 deals environment will likely see heightened activity in the renewables and artificial intelligence spaces, including data centres.

Industry analysts believe that India’s data centre capacity will grow fivefold by 2030 to over 8GW, from current levels of around 1GW, according to a KPMG report from December 2025. This growth is expected to generate capital expenditure of over $30 billion.

This growth in the sector will ensure that buyers and PE-backed platforms continue to pursue targets in data platforms, AI-related infrastructure, and renewable power sources to feed these assets, Girotra said.

She also said that India will see significant activity in the coming months in sectors where the domestic consumer is the end user, such as healthcare services.

"The urban middle class is rising, and rural India is doing well again. So naturally, everyone wants to play to that market, and that is where the M&A appetite is going to be enormous," she explained.

The consumer healthcare space is currently ‘on fire’ with deals like Manipal's $760 million acquisition of Sahyadri Hospitals and Torrent Pharma's acquisition of a controlling stake in JB Chemicals from KKR, she said.

Overall, in 2025, investment in India's pharma sector stood at $8.3 billion across M&A and PE/VC deals, with public markets adding another $1.5 billion through IPOs and $1.2 billion through Qualified Institutional Placements (QIPs), according to Grant Thornton Bharat data.

PE firms will continue to invest in single speciality formats, either directly or in platform mode, with focus on oncology, In Vitro Fertilization (IVF), mother and child care, dialysis and eyecare, Grant Thornton added.

But healthcare, Girotra said, is just one of the many sectors that will play out.

"While the government has taken a ‘leapfrog’ lead in infrastructure that private corporates haven't traditionally matched, other areas like semiconductors, rare earth minerals, cement, and paints are also going to see a lot of excitement," she said without giving details.