Investment Insights
What Cross-Border Opportunities Exist in India’s Alternatives and Credit Market?
Pranob Gupta Managing Director, Business Head - India Alternatives (Credit & Hybrid Strategies)
Table of Contents
India Alternatives, Credit Structuring and Cross-Border Corridors
The credit market in 2025 was defined by a "barbell" dispersion. On one end, we see global funds chasing high-yield, complex special situations with large check sizes. On the other, domestic funds are aggregating local wealth to service near-investment-grade needs.
The alpha in 2026 lies in the "missing middle", the bespoke, cross-border structured credit that neither global giants nor local banks can effectively service.
This middle segment is expanding rapidly, driven by founder-led companies that are too large for venture lenders but too complex for traditional banks. These borrowers require tailored capital structures, often combining mezzanine, guarantees, and offshore-onshore linkages, that reward structuring skill over balance sheet size.
A key theme for the year ahead is the "India-Global Corridor."
This is now a two-way street. We are seeing a surge in Indian corporate "national champions" expanding globally, acquiring assets in the UK, Singapore, or the GCC, and requiring financing that bridges their Rupee balance sheets with Dollar liabilities.
Conversely, global capital is increasingly entering India not just as "tourist money" but through structured backstops, allowing foreign LPs to fund Indian portfolio companies directly. This evolution reflects growing comfort with Indian legal frameworks and enforcement mechanisms, particularly in secured lending.
Investors must also confront the "Paradox of Risk."
While Western markets grapple with potential contagion from high-leverage defaults, emerging market credit is proving resilient due to lower leverage and stronger covenants. The volatility drivers for 2026, tariffs, geopolitics, and trade wars, are paradoxically bullish for private alternatives.
As public markets become increasingly susceptible to macro shocks, private credit offers a shelter of non-correlated, contractually secured returns.
However, risks remain.
The steady depreciation of the INR forces a sharper focus on yield. For global investors, the gross yield is irrelevant; it is the net, currency-hedged return that matters.
In this environment, the "flight to quality" will accelerate, pushing capital toward managers who can structure around currency volatility while capturing the structural growth premium of the Indian economy.
