Healthcare Surges to Second in India's Private Credit Deals, Domestic Funds Dominate H1 2026

India's private credit market showed strong activity in the first half of 2026, with a total of $3.5 billion invested across 102 deals. A major shift has put the healthcare sector squarely in the spotlight, climbing to the second-largest recipient of private credit, trailing only real estate. This surge, highlighted by a new EY report, underscores India's evolving financial landscape and growing confidence in its domestic investment power. Domestic funds were the real power players, driving 74% of the deal value and nearly 79% of the deal count, showing their increasing muscle against global investors. This period also saw a notable pivot towards mid-sized transactions, valued between $10 million and $60 million, making up 61% of total deal value as lenders favored opportunities with clearer risk-return visibility. The healthcare sector rise is fueled by its stable cash flows and growth potential, attracting significant capital for purposes like refinancing and acquisition financing, with notable deals involving players like Manipal Group. Looking ahead, the market expects continued strong activity, with many investors remaining bullish on India's private credit scene over the next couple of years, despite global uncertainties. However, competition is on the horizon. From July 1, 2026, banks in India can now step into acquisition financing, potentially offering cheaper funds for simpler deals. Private credit funds will likely maintain their edge in complex, bespoke, and time-sensitive transactions, but this new dynamic means all eyes are on how this competitive landscape will shape up.