Cerberus Capital Management LP is looking to expand its private credit portfolio in India, capitalizing on the shift of local non-bank finance lenders towards consumer credit away from corporate lending. This change in focus presents a significant opportunity for private credit lenders, as highlighted by Indranil Ghosh, managing director and head of pan-Asia special situations at Cerberus, stating that there is potential for both local and international players to participate in this space. India's growing prominence as a key market for private credit activity has caught the attention of global firms, with significant investments being made in the country, drawn by its status as the fastest-growing major economy.
In recent months, India's shadow banks have faced regulatory pressures, leading to restrictions being imposed on several entities such as JM Financial Ltd. and IIFL Finance Ltd. Despite this, the private credit landscape in India is expected to see substantial growth, with assets under management projected to increase from 0.4 percent of the gross domestic product in 2022 to 1-1.2 percent by 2028, according to a private credit report by Praxis Global Alliance and the Indian Venture and Alternate Capital Association. Ghosh emphasized that the Indian business for Cerberus is likely to see growth, especially given the rise of local private credit managers who raise funds from Indian high net worth individuals.
Indranil Ghosh also highlighted that sectors like real estate, manufacturing, and financial services will continue to rely on private credit to meet their capital requirements. This reliance on private credit is expected to persist, showcasing the ongoing demand and importance of private credit in supporting various industries in India. With the country's stability and growth potential, India is positioning itself as an attractive destination for private credit investors, creating a favorable environment for investment opportunities and higher returns in the market.