Homegrown private credit firms in India are expanding their dominance with increased investment pools and larger deal sizes, signalling a pivotal shift in the country’s lending landscape.
Homegrown private credit firms are taking a larger slice of India’s lending market as domestic managers build bigger pools of capital and increasingly compete for larger transactions, according to EY. The consultancy said local funds accounted for 74% of private credit deal value in the first half of 2026, up sharply from 32% in the same period a year earlier. EY tracked 102 transactions above $10 million, totalling about $3.5 billion, underscoring how quickly the market is shifting towards Indian players.
The change reflects both the scale of demand and the willingness of local managers to move up the risk and size curve. In a sign of that momentum, Lighthouse Canton has launched the LC Luminere Credit Fund, a SEBI-registered Category II alternative investment fund with a target of about 1,200 crore rupees, or roughly $130 million. According to Moneycontrol, the fund will focus on structured credit for mid-to-large companies, with a six-year life and an average deal duration of around three years.
Competition is also intensifying among established domestic alternatives platforms. ASK Alternates, part of the Blackstone-backed ASK Asset & Wealth Management Group, has launched its second private credit fund with a target of 2,500 crore rupees, including a 1,500 crore rupee greenshoe option. The fund aims to serve borrowers seeking quicker and more flexible financing than traditional banks can usually offer, while Motilal Oswal Alternates recently closed the first tranche of its India Credit Excellence Fund-I at 1,700 crore rupees, focused on secured lending to profitable mid-market businesses that need tailored capital structures.
The strongest signal of the market’s depth may be the ambition of larger managers. Bloomberg reported in March that Kotak Alternate Asset Managers is seeking as much as $2 billion for its third private credit fund, with a final close targeted for September and investments planned across sectors including data centres, pharmaceuticals, diagnostics, steel and cement. Separately, Financial Express reported that Lighthouse Canton plans to expand its Indian private credit and hybrid debt business fivefold over the next five to seven years as part of a broader push to double global assets under management to $10 billion by 2027.
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