The private credit market in India has gained popularity in recent years, says Ashish Khandelia, founder of Certus Capital, with significant growth following the IL&FS crisis in 2018. Foreign institutional investors initially filled the liquidity gap in the market, but domestic fund managers, family offices, and high-net-worth individuals have also become active participants in private credit investments. Over the last few years, the market has seen over $15 billion in private credit transactions, with real estate being a significant portion of it.
The Indian real estate market has experienced an upcycle, driven by factors like increased affordability, rising salaries, and reasonable mortgage rates. This trend is expected to continue for the next few years, maintaining healthy levels of demand.
Regarding mortgage rates, Khandelia does not anticipate a significant increase in rates, as India is in a better position compared to many other countries. Despite a 2 per cent increase in rates over the past year and a half, it has not significantly impacted demand for real estate.
Private credit opportunities in India are evolving, with growth opportunities and special situations being prevalent. Major cities like Mumbai, Bengaluru, Hyderabad, and NCR are showing robust growth in various real estate segments, including residential, warehousing, and data centers.
Family offices in India have become significant investors in real estate and private credit. As generational shifts occur, wealth is being converted into family offices, and they are increasingly looking for opportunities in these asset classes.
On being asked about Certus Capital’s plan for the next five years, Khandelia says that the company aims to participate in the growth of India’s alternative credit market, expanding beyond real estate to various credit categories.
In this episode of the State of the Economy podcast, Khandelia discusses various aspects of the private credit market and real estate trends in India. Listen in.
(Host: Abhishek Law, Producer: Nabodita Ganguly)
About the State of the Economy podcast
India’s economy has been hailed as a bright spot amid the general gloom that seems to have enveloped the rest of the world. But several sectors continue to stutter even as others seem set to fire on all cylinders. To help you make sense of the bundle of contradictions that the country is, businessline brings you podcasts with experts ranging from finance and marketing to technology and start-ups.