As private credit markets in the US begin to reflect late-cycle dynamics, narrowing spreads, intensifying competition and monetary policy inflection transitioning from rate pause to rate cuts, India’s private credit ecosystem is moving in the opposite direction. What is unfolding is not a speculative surge, but a gradual reordering of relative value within global credit markets.
For global allocators, private credit is no longer a monolithic asset class. It is increasingly a geography-sensitive decision, shaped by divergent macroeconomic trajectories, regulatory regimes and capital supply conditions.
Diverging Credit Cycles
Over the past decade, private credit has emerged as a cornerstone of alternative investing, particularly in developed markets. In the US, business development companies and direct-lending platforms benefited from abundant deal flow, attractive spreads and a prolonged period of higher-for-longer rates. That environment is now changing.
With Fed rate cuts, floating-rate portfolios are facing prospective yield pressure. At the same time, excess capital has intensified competition, compressing spreads and softening underwriting discipline at the margin.
India’s private credit market, by contrast, is at a different point in its cycle. It has emerged as a scaled, institutionalised segment within the domestic credit system—supported by increased adoption from India Inc, robust underlying credit demand and increased footprint of domestic asset managers
Scale and Institutionalisation
The inflection is increasingly visible in the numbers. Deal volumes in India’s private credit market reached roughly $9 billion in the first half of 2025, with total assets under management at over $30 bn currently – emerging as the largest private credit market in Asia and expanding steadily. India private credit still accounts for only 0.6% of GDP vis-à-vis that of 4 – 5% of GDP in developed economies like US, highlighting a significant under-penetration and a long growth runway.
Additionally, the change in composition of this growth has also been significant. Larger-ticket transactions, including deals exceeding $100 million, are becoming more common. This reflects more sophisticated structuring and growing confidence among institutional lenders. Scale brings its own discipline. Larger, repeat transactions support better origination standards, stronger corporate relationships and clearer exit pathways—conditions that distinguish investible yield from merely attractive yield.
360 ONE, with its market leadership position in private credit in India, having assets under management of over $2 bn and a market share of ~15%, benefits from this scale advantage. It has solely led and structured several such large and complex transactions, while maintaining structural seniority, downside protection, attractive yields and a strong track record.
A Persistent Yield Differential
At the core of India’s relative-value proposition lies a notable yield gap. Senior secured and unitranche private credit transactions in India continue to price in the mid-teens to high teens even as covenant packages strengthens, collateral frameworks become more robust, and borrower quality rises. In contrast, yields across US private credit portfolios and listed Business Development Companies (BDCs) are largely clustered in the mid-single to low-double digits, with downward pressure building.
This divergence is not purely cyclical. It reflects structural factors: higher nominal growth, a relative scarcity of long-duration private capital, and greater complexity in execution and enforcement that continue to support a capital scarcity premium in India.
At the same time, higher-yielding markets place a premium on manager selection and underwriting discipline. In India, local presence and structuring expertise are not optional—they are central to outcomes. 360 ONE has been widely recognised for its proprietary origination and its structuring expertise and consistently ranks among market leaders in private credit origination having originated volumes of over $1.3Bn in the last two years, reflecting deep local execution capabilities. It has an unparalleled vintage of over 10 years with a track record of having raised more than 7 credit funds.
Risk Remains, But It Is Increasingly Priceable
India’s private credit market is not without challenges. Currency exposure, governance variability, sectoral concentration and enforcement timelines remain material considerations.
With India private credit market maturing, risk is shifting from being opaque to being priceable. It is a quiet compounding business, wherein risk can be adequately mitigated through successful strategies increasingly emphasizing on senior secured positioning, active portfolio management, and local execution capabilities.
The private credit approach at 360 ONE reflects this evolution, with a focus on capital preservation and robust & institutionalised investing processes with focus on capital structuring, asset backing and disciplined underwriting, supported by long-term market relationships.
Global Capital – All eyes on India Private Credit
Given the emergence of track record of India private credit funds, India is primed for large institutional allocation from global investors with dislocation in yields proving to be a winner. Smart money investors are already making the move and are looking at Asia with India dedicated vehicles across the alternative asset segments.
India today is offering a combination that is increasingly rare: elevated nominal yields, improving institutional depth and meaningful diversification
As global spreads compress, India offers compelling relative value—and 360 ONE plays an integral role in that growth story.
Source: EY, Bain & Company, Crisil, ICRA, McKinsey
Disclaimer
Securities investments are subject to market risks and there is no assurance or guarantee that the objectives of the scheme/strategy will be achieved. This is for informational purposes only and should not be regarded as an offer to sell or as a solicitation of an offer to buy the securities or other investments.
