According to EY’s Private Credit Pulse Survey (part of its H1 2026 market update), Indian private credit funds are steadily adopting artificial intelligence (AI) tools to enhance deal sourcing, credit assessment, and portfolio monitoring.
Key Survey Findings
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AI Adoption Breakdown:
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67% of funds report moderate AI usage, primarily deploying tools for data analysis, routine deal monitoring, and underwriting support.
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11% have deeply integrated AI tools into core deal origination and credit assessment workflows.
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22% are in the early stages, actively piloting AI-driven applications.
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Market Environment & Returns Focus:
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Expansion Despite Uncertainty: India’s private credit market expanded in H1 2026 despite global geopolitical tensions and commodity price fluctuations.
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Targeted Yields: 67% of respondents prefer high-yield deals targeting returns above 18%, while 33% focus on performing credit in the 12%–18% range.
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Primary Capital Drivers: Key demand is emerging from M&A financing, capital expenditure requirements, and stress-related special situation funding.
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Fund Manager Outlook & Deployment Pace:
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Market Sentiment: 60% of survey respondents hold a bullish outlook on the private credit asset class over the next 1–2 years, with 13% being very bullish and 27% taking a cautious stance.
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Deployment Speed: 40% report maintaining their deployment pace, while another 40% have slowed down deployment due to heightened sectoral and geographical caution.
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