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India Inc's Credit Surge Fuels Economic Revival
9 Feb
Summary
- Corporate credit growth is reviving, driven by key sectors.
- Banks anticipate stronger momentum from expanding export opportunities.
- Major banks report significant year-on-year increases in corporate loans.
Lenders in India are witnessing a significant upturn in corporate credit growth. This revival is primarily driven by robust demand from sectors including oil and gas, infrastructure, metals, power, and large non-bank financial companies. India Inc. is accelerating its capital expenditure and increasing its drawdowns for working capital, reflecting stronger overall economic activity.
Bankers foresee this positive momentum intensifying as multiple trade agreements are expected to broaden export opportunities. This, in turn, is anticipated to encourage capacity additions and stimulate cross-border supply chains. State Bank of India reported a substantial 13.4% year-on-year rise in its corporate loan book, reaching ₹13.33 lakh crore in the October-December period.
This growth marks a considerable increase from the 7.1% expansion observed in the previous quarter. Other major lenders, including HDFC Bank, ICICI Bank, and Axis Bank, have also reported healthy growth rates in their corporate portfolios. The combination of a strengthening domestic investment cycle, improved capacity utilization, and the projected benefits from trade pacts suggests sustained corporate loan growth in the upcoming quarters.
