I wrote in May last year that private credit funds were mushrooming in Asia, lured by opportunities including double-digit returns from lending to distressed Indian borrowers.
However, the growth of private credit as a financing option doesnāt eliminate its structural shortcomings: the lower quality of some borrowers and patchy enforcement. I noted that the ability to recover a loan when it goes bad would eventually prove to be the key differentiator in this increasingly crowded landscape.
On 18 March 2026, The Economic Times (ET) broke the news that early signs of stress were emerging in a handful of private credit transactions in India, although such developments rarely became public because the funds were not required to disclose asset-level performance.
Private credit lenders do have access to legal remedies such as the insolvency process under the Insolvency and Bankruptcy Code (IBC), but recoveries are uncertain and often take years, according to ET.
A report released by Incorp Restructuring Services this week showed that while the IBC facilitates resolutions, liquidations yielded recoveries of around 4% of admitted claims, with nearly 70% of processes extending beyond two years.
The manufacturing and real estate sectors accounted for almost 70% of all admitted CIRPs (Corporate Insolvency Resolution Process) under the IBC, the Incorp report said, citing data from the Insolvency and Bankruptcy Board of India. Textile companies were major debtors within the manufacturing sector.
The low recovery rate and lengthy process of a liquidation may partly explain why some lenders prefer trying to work it out with the borrower, such as by rolling over loans, converting part of their exposure into equity, or extending the bridge towards a potential liquidity event.
As I wrote on 22 April 2026, private credit has a role to play in Asiaās financing landscape, which is becoming more mature and diverse. But the growing calls for disclosures and client education should also not be labelled as noise.
Companies to Watch
šø Vedanta Group
I wrote in April last year that the Indian group was like a cat with nine lives, securing a private credit facility in late 2023 to emerge out of a credit crunch, and then moving towards splitting its businesses in a major ādemergerā. Vedanta also shook off the campaign launched by short-seller Viceroy Research since July 2025.
However, the conglomerate controlled by Indian tycoon Anil Agarwal has faced setbacks this year, including a loss to fellow billionaire Gautam Adaniās group in its bid for bankrupt infrastructure developer āJaiprakash ā Associates.
Then on 2 June 2026, Indiaās Enforcement Directorate searched the offices of the groupās domestic operating unit, as part of a probe under foreign exchange laws. This is a potentially significant development, as ābrand feesā and dividends upstreamed from India are a source of cash to service debt at the London-based holding company, Vedanta Resources, according to Moneycontrol.
Meanwhile, the conglomerate has hired eight banks to refinance USD 5.2 billion of bonds and loans, Bloomberg reported on 9 June 2026. It remains to be seen whether the probe in India would affect Vedantaās latest refinancing.
People to Watch
Clients want clear answers, not caveats, from external counsel, Bar and Bench quoted Vedanta Deputy General Counsel Preet Sethi as saying at a panel discussion during London International Disputes Week 2026.
She was reportedly responding to a question on what she expects from external counsel today that she was not asking for five years ago. Sethi highlighted a growing frustration among in-house teams with overly cautious legal advice from external counsel, according to Bar and Bench.
Acrostics Asia is an independent credit intelligence provider that connects the dots across Asian sovereigns, private credit and restructurings.