Private Credit: Filling India's Funding Gaps

The session opened with a clear framing of why real estate has emerged as the single largest deployment sector for private credit in India, accounting for 42% of total deal value in H2 2025, well ahead of healthcare and industrial products at 15% each. Mr. Pankaj Sharma set the context by walking through how RBI restrictions on bank financing for land acquisition and promoter contributions, now extended to bank-group NBFCs, have widened the structural gap that private credit is stepping in to fill. The panel returned repeatedly to the mid-stage construction funding gap, pegged at US$15–20 billion, as the defining opportunity for domestic and offshore capital over the next cycle. Mr. Pratik Tibrewala offered a borrower-side perspective on how developer capital stacks are being assembled today across NCR and other tier-one markets, noting that construction finance, refinancing and structured developer capital have replaced special situations as the core of the activity. Mr. Sandeep R. Khandelwal and Mr. Ankit Jain then unpacked how underwriting has tightened as housing sales moderate across Mumbai, Bangalore and NCR, with greater emphasis on cash-flow ring-fencing, RERA-linked milestones, and clearer exit visibility through project sales or refinancing rather than balance-sheet takeouts. Pricing was addressed candidly. The panel discussed where IRR expectations sit today for senior secured construction finance versus mezzanine and structured positions higher up the capital stack, and how the entry of new funds, LVF threshold reduction from ₹70 crore to ₹25 crore, and expanded ECB and GIFT City routes are compressing yields on the safer end of the spectrum while widening the pool of deployable capital. Ms. Sonal Mehta drew out the implications for family offices and HNIs evaluating direct exposure versus fund routes. The closing exchange focused on what the next 18 months look like: a more demanding credit cycle, greater differentiation between disciplined developers and stretched ones, and a supply side of capital that is becoming more competitive even as the funding gap remains large. Participants left with a clearer view of where private credit is being priced, how it is being structured, and which segments of the developer capital requirement remain most underserved.