Private credit — lending directly to companies without going through banks — has become one of the world’s fastest-growing investment segments. In India, it’s about to find its biggest backer yet.

“Blackstone’s move could redefine India’s non-bank lending landscape, bringing global-grade credit discipline to fast-growing enterprises.”
— Senior partner, Mumbai-based investment firm (paraphrased)

The rise of private credit — and why India is ready

Global capital markets have evolved since the pandemic. With banks tightening lending standards and bond markets becoming volatile, institutional investors have flocked to private credit — loans negotiated directly between asset managers and borrowers. In the U.S., this segment is already worth over $1.8 trillion. India’s share is smaller but expanding rapidly — from roughly $20 billion in 2021 to a projected $60 billion by 2026.

Blackstone’s India expansion fits that trend. The firm, which manages more than $1 trillion globally, already runs private credit operations in the U.S. and Europe. With India’s economy growing over 7%, the country offers something those regions don’t — scale, speed, and yield.

Apurva Shah: The man steering the ship

Blackstone has appointed Apurva Shah, a veteran of India’s structured finance and debt markets, to lead the new initiative. Shah previously managed credit portfolios across leading financial institutions and has deep experience structuring mezzanine and hybrid deals.

His focus: mid-sized corporates seeking growth financing, infrastructure firms needing flexible capital, and private equity-backed companies preferring private debt to dilution.

How this changes the credit landscape

For decades, Indian companies relied primarily on banks for debt financing. That dependence created inefficiencies: delays, high collateral requirements, and inflexible repayment schedules. Blackstone’s entry brings in a third alternative — global-scale private credit tailored for speed and structure.

• For borrowers: Faster deal cycles and customized terms.
• For investors: Access to high-yield, lower-volatility Indian credit exposure.
• For the system: Diversification of credit channels and reduced bank concentration risks.

“India’s credit market is maturing. Institutional private lending will fill the capital gap banks can’t.” — Global credit strategist, JP Morgan (via ET)

Past → Present → Future

• Past: Private credit largely limited to distressed-asset plays and opportunistic funds.
• Present: New platform launches with the domestic credit team and local governance framework.
• Future: Potential $5–7 billion deployment over five years across structured, senior, and mezzanine loans.

Why this matters — the bigger financial picture

Private credit is not just about returns. It’s about flexibility. For India’s rapidly scaling private sector — from renewable energy to tech manufacturing — this influx of global credit offers capital that can move faster than banks and with less bureaucracy than equity markets.

It could also inspire domestic funds like Edelweiss, Kotak, and Piramal to double down on their own private credit arms, spurring competition and innovation.

Challenges ahead

• Regulatory clarity: India still lacks a unified framework for private credit funds.
• Deal sourcing: High-quality credit underwriting is critical to avoid bubble risks.
• Currency risk: Global investors may face INR volatility; hedging costs will matter.

Quick FAQs

Q: Will this make borrowing cheaper for Indian firms?

A: Not immediately — but it will make borrowing faster and more flexible. Over time, competition could compress rates.

Q: Will domestic investors be able to participate?

A: Institutional and high-net-worth investors can access such deals through AIFs and debt funds aligned with Blackstone’s structures.