Indian Private Credit Funds Embrace AI for Deal Sourcing and Underwriting
EY survey finds Indian private credit funds increasingly using AI for deal sourcing, data analysis, and credit assessment, with adoption varying across the market.
India's private credit funds are increasingly turning to artificial intelligence (AI) to enhance their investment processes, according to a new survey from EY. The findings indicate a gradual but notable shift in how these funds approach deal sourcing, data analysis, and credit assessment.
The EY Private Credit Pulse Survey, part of its H1 2026 update, reveals that 67% of respondents use AI moderately, primarily for data analysis and monitoring. A smaller group, 11%, stated that AI tools are already core to their origination and credit analysis processes. Another 22% are in the early stages of adoption, currently piloting AI tools.
This suggests that while AI adoption is not yet uniform, it is becoming an increasingly important part of the private credit landscape. Most funds are using the technology selectively, while a more forward-looking segment is integrating it deeply into their core operations.
The survey also provides insights into the broader market dynamics. Despite global economic uncertainty, geopolitical tensions, and commodity price pressures, India's private credit market expanded in the first half of 2026. Demand is being driven by stress-related situations, capital expenditure requirements, and mergers and acquisitions financing.
Looking ahead, sentiment remains largely positive, with 60% of respondents bullish on the asset class over the next one to two years, 27% cautious, and 13% very bullish. In terms of deal preferences, 67% of respondents favored high-yield deals targeting returns above 18%, while the remaining 33% targeted performing credit with returns between 12% and 18%.
The survey also assessed the impact of geopolitical tensions on deployment activity. While 40% of respondents reported no change in their deployment pace, another 40% said they had slowed deployment due to increased caution over sectors and geographies.
Overall, the findings suggest that AI adoption in private credit is likely to deepen as funds move beyond experimentation toward greater use in origination, underwriting, and ongoing portfolio monitoring.