Healthcare emerges as second-largest sector for private credit deployment in H1 2026: EY Report

Domestic funds emerged as the dominant force in India’s private credit market in H1 2026, accounting for 74% of total deal value and nearly 79% of deal volume, according to the EY Private Credit Report H1 2026. The market remained resilient during the period, with investments reaching US$3.5 billion across more than 100 transactions above US$10 million, broadly in line with US$3.4 billion recorded in H2 2025. Private credit activity continued to be supported by refinancing, holding company (HoldCo) funding and acquisition financing, despite global macroeconomic uncertainty and market volatility.

As per the EY report, healthcare emerged as the second-largest sector for private credit investments in India by deployment, accounting for 13% of total deal value in H1 2026, second only to real estate. The sector’s strong showing reflects growing investor confidence in healthcare businesses that offer stable cash flows, defensive characteristics and scalable growth opportunities.

The sector witnessed significant refinancing and expansion-related financing activity during the period, with notable transactions including US$124 million raised by Manipal Group through private credit financing and US$48 million secured by ASG Hospital Group for group funding requirements.

As India’s healthcare industry continues to benefit from rising healthcare expenditure, increasing demand for quality medical infrastructure and sector consolidation, private credit funds are increasingly positioning themselves as long-term capital partners. The strong flow of credit into healthcare suggests investors are seeking exposure to sectors that can offer resilience amid global economic and market volatility.

Dinkar Venkatasubramanian, Partner and National Leader – Debt and Special Situations EY India said, “India’s private credit market is entering a new phase of evolution.  What began as a niche source of alternative capital has become an important pillar of the country’s financing ecosystem.  We are witnessing the emergence of new opportunities across acquisition financing, growth capital, refinancing, special situations and value creation-led transactions. The increasing participation of domestic capital continued regulatory strengthening and growing acceptance of private credit among borrowers are all contributing to a deeper and more resilient market.  As India’s economy continues to expand, we believe private credit will play an increasingly important role in funding growth, enabling transformation and supporting the next generation of Indian enterprises.”

Domestic funds strengthened their position in India’s private credit market during H1 2026, accounting for 74% of total deal value and approximately 79% of deal volume. By ticket size, transactions above US$120 million constituted 18% of total deal value, compared with 27% in H2 2025. In contrast, transactions in the US$10 million to US$60 million range accounted for 61% of total deal value, up from 51% in the previous period. This shift highlights the growing prominence of mid-sized transactions, as lenders increasingly focused on targeted opportunities with stronger risk-return visibility.

Vishal Bansal, Partner, Debt and Special Situations, EY India said, “The growing share of domestic capital is one of the most significant developments in India’s private credit market. Domestic funds are increasingly identifying opportunities across refinancing, acquisition financing and special situations, particularly in the mid-market segment where demand for structured capital remains robust. At the same time, regulatory developments and a broader set of financing options are improving transaction execution and supporting the continued growth of the asset class.”