Moelis India CEO Foresees Private Credit Surge and AI-Driven Deals in 2026
Manisha Girotra, the chief executive of Moelis India, has outlined a bullish outlook for India's deal environment in 2026, highlighting the rapid expansion of private credit, the rise of dual-track exit strategies, and significant capital expenditure in artificial intelligence (AI)-led infrastructure and healthcare sectors.
Private Credit Market Booms with High Yields
According to Girotra, India's private credit market is experiencing a substantial boom, driven by its flexibility compared to traditional bank loans. "India's private credit market is booming," she stated in an interview. This flexibility allows private credit to be structured to reflect individual risk appetites, making it an attractive option for complex mergers and acquisitions (M&A).
Despite its current small size—estimated at $25-30 billion in assets under management, representing only 1.2% of the corporate lending sector as of FY25-end—private credit offers yields ranging from 14% to 22%. This is significantly higher than the 8-10% average yield for banks and 10-13% for finance companies in India, according to S&P Global's 2025 report.
Girotra pointed to notable examples, such as Adani Airports Holdings Ltd., which refinanced a $750 million debt facility with private credit lenders led by Apollo-managed funds. Additionally, in June 2025, KKR & Co. provided $600 million in financing to Ranjan Pai's Manipal group, marking its largest private credit investment in India.
Competition and Dual-Track Strategies Intensify
The competitive pricing of private credit has enabled it to gain a foothold in India's infrastructure assets. However, Girotra noted that competition with other capital forms has intensified, particularly as equity market valuations offer cheaper alternatives. This has led to increased demand for covenant-lite transactions, putting pressure on private credit yields.
Girotra remains optimistic, expecting private credit's share of borrowings to rise. "I think you'll see it play a much larger role going forward," she said. She also highlighted the growing competition between private capital and public markets, with India's IPO market raising over ₹1.75 trillion from more than 350 companies in 2025.
This dynamic is fostering dual-track processes, where companies pursue both IPO and M&A routes simultaneously. Girotra cited the example of Manjushree Technopak in late 2024, where Advent International sold its portfolio firm to PAG after a dual-track strategy.
AI, Data Centres, and Healthcare Drive Future Deals
Looking ahead to 2026, Girotra anticipates heightened activity in renewables and AI spaces, including data centres. Industry analysts project that India's data centre capacity will grow fivefold by 2030 to over 8GW, from current levels of around 1GW, requiring capital expenditure of over $30 billion.
"This growth in the sector will ensure that buyers and PE-backed platforms continue to pursue targets in data platforms, AI-related infrastructure, and renewable power sources to feed these assets," Girotra explained.
Healthcare is another key sector, with significant M&A activity expected. The consumer healthcare space is already active, as seen in deals like Manipal's $760 million acquisition of Sahyadri Hospitals and Torrent Pharma's stake acquisition in JB Chemicals. In 2025, investment in India's pharma sector reached $8.3 billion across M&A and PE/VC deals, with public markets adding another $2.7 billion through IPOs and QIPs.
Girotra also mentioned other sectors poised for excitement, including semiconductors, rare earth minerals, cement, and paints, though she did not provide specific details.
Key Takeaways for 2026
- Private credit, though a small part of corporate lending, is becoming preferred for complex M&A due to its structuring flexibility.
- High yields of 14-22% are attracting global players like KKR and Apollo to India's private credit market.
- Dual-track strategies are on the rise as companies navigate between IPO and M&A options to secure optimal exits.
- Data centre capacity expansion and AI infrastructure are set to drive $30 billion in capex and significant deal flow.
- Healthcare, renewables, and consumer-facing services will be primary deal drivers in the coming year.
