India RERA Shapes Private Credit In Real Estate

India’s private credit market remained active in the first half of 2026 despite global uncertainty, with real estate taking the largest share of deal value. The shift matters for cities because alternative financing is increasingly supporting property projects, refinancing and stressed assets, while lenders face greater pressure to assess project viability, compliance and delivery risks.

Private credit deployments totalled $3.5 billion across 102 transactions above $10 million in H1 2026, broadly matching the $3.4 billion recorded in the previous six months. The sharp 61% year-on-year fall therefore needs context: H1 2025 included an unusually large $3.1 billion fundraise, making the comparison less representative. Real estate accounted for 35% of private credit deal value, down from about 42% in H2 2025 but still ahead of healthcare at 13% and food and beverage at 12%. Refinancing, project-related funding, holding-company financing and acquisitions were among the key sources of demand. For developers, private credit can fill funding gaps where conventional lending does not provide the required structure or speed. But that flexibility also places greater importance on project-level checks. In markets governed by the Real Estate Regulatory Authority (RERA) framework, lenders and investors increasingly need visibility on approvals, project status, construction progress and the ability to complete developments without creating additional financial stress.

That scrutiny is particularly relevant because real estate was also identified as the sector with the highest perceived default risk among respondents to the private credit survey. The combination of strong demand and elevated risk suggests that capital availability alone will not determine which projects secure funding. Domestic capital is becoming more influential. Indian funds represented 74% of deal value and nearly 79% of transaction count in H1 2026. Meanwhile, mid-sized transactions between $10 million and $60 million made up 61% of total deal value, indicating that activity is spreading beyond very large financing rounds. The banking system provides a stronger backdrop for this expansion.

RBI data showed scheduled commercial banks’ gross non-performing assets at 1.8% and net NPAs at 0.4% in March 2026. Private credit, therefore, is not simply replacing bank finance; it is increasingly occupying specialised parts of the capital market. For urban development, the next test will be whether this funding reaches projects capable of delivering housing and infrastructure efficiently, rather than merely supporting asset values. Stronger due diligence, transparent RERA compliance and disciplined lending will remain important as private capital moves deeper into India’s expanding property market.

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India RERA Shapes Private Credit In Real Estate