'India remains in early phase of private credit cycle'

Private credit has quietly emerged as a core financing channel for India’s mid-market companies, filling a structural gap left by banks and a still-shallow corporate bond market, says Rohit Gulati, chief executive officer of UTI Alternatives.

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In an email interview with Samie Modak, Gulati says the asset class has seen rapid growth driven initially by domestic family offices and high-networth individuals (HNIs), with institutional capital following. Edited excerpts:

Private credit has grown rapidly in India over the past few years. What has underpinned this growth, and will the momentum be sustained?

Eight years ago, when we launched our first series of the mid-market performing credit strategy, there was a healthy dose of scepticism in every conversation with prospective investors. Since then, the market has evolved into a core financing channel for India’s mid-market economy. This evolution has been shaped not by global institutional capital but largely by domestic family offices and HNIs, with Indian and global institutions now following. From both domestic and global perspectives, India still remains in an early phase of the private credit cycle. Despite all the hype, I can probably count on my fingers the private credit managers that truly matter. The market still has room for many more players.

What structural gaps are private credit funds filling today that banks and traditional non-banking financial companies cannot?