The U.S.-Israeli war with Iran has now entered its 12th week with no visible resolution in sight, creating sustained uncertainty across global markets. The prolonged conflict is increasing concerns about the global economy as oil prices remain above $100 per barrel, adding inflationary pressure across economies and raising fears of slower growth. Despite these mounting risks, global equity markets continue to remain strong, driven largely by enthusiasm around artificial intelligence and technology stocks, as reported by Reuters. The upheaval is affecting industries across Europe and Asia, with one-fifth of companies in the review flagging financial impacts due to the war.
The U.S.-Israeli war with Iran has already cost global companies at least $25 billion and counting, with the bill continuing to climb according to a Reuters analysis. At least 279 companies have cited the war as a trigger for defensive actions, including price increases and production cuts. Major corporations are warning of significant financial hits - Japan's Toyota warned of a $4.3 billion hit while P&G estimated a $1 billion post-tax profit blow. The prolonged nature of the conflict is creating deeper economic damage and tighter financial conditions across global markets, with the longer the war continues, the greater the risk of deeper economic damage.
India's $12-billion private credit market is experiencing a massive influx of capital as volatile public equity markets and a narrowing IPO window in 2026 create new opportunities for alternative lenders. A flurry of fund launches reflects this growing appetite, with ASK Alternates and Lighthouse Canton both launching new private credit funds, while Sundaram Alternates raised a ₹2,500-crore real estate credit fund. The market offers returns of 14-22%, significantly higher than compressed spreads available in the US and Europe, making it increasingly attractive for lenders. As reported by The Financial Express, many transactions are now in the ₹200-500 crore range, while the largest deals run into several billion dollars among the biggest in Asia.
Private credit funds are tightening underwriting standards amid concerns around cash flows, operating margins and input cost inflation, with the current environment giving lenders greater negotiating power. According to The Financial Express, investors are negotiating better terms around collateral, covenants and cash-flow servicing in the relatively uncertain environment. ASK Alternates launched its second private credit fund with a ₹2,500 crore target corpus and ₹1,500 crore greenshoe option, expecting returns to improve marginally as larger fund sizes strengthen negotiation capabilities. Kotak Alternate Asset Managers is planning to raise a $3-billion private credit fund, expecting strong demand for bespoke funding solutions including preferred equity, structured last-mile financing and mezzanine financing as companies find it harder to raise growth capital through listed markets.
The Iran war uncertainty is accelerating a broader structural shift in India's corporate financing landscape, with private credit increasingly emerging as a mainstream funding avenue alongside banks and equity markets. According to The Financial Express, the traditional banking system has structural rigidities, creating a clear complementary space for private credit. Finance ministers and central bankers from G7 nations will gather in Paris this week amid rising geopolitical and economic uncertainty, with discussions expected to cover the Iran conflict and oil-price shock. The current macro environment is viewed not as a demand destroyer but as a catalyst for highly structured and resilient corporate financing solutions, with companies prioritising certainty of execution, speed, and customised structuring amid volatile market conditions.
