Bankers told ET that in the last few quarters, higher use of working capital, driven by rising commodity prices, fueled demand for credit, while corporate loan growth since the September quarter has been trending towards new capacity building.
“In our case, most of the corporate growth has been led by investments,” said Sanjeev Chadha, managing director of the company. Bank Of Baroda, “We have seen decent growth in the road sector and renewable energy. This growth is coming from relatively large corporates as they have delivered substantially over the years.”
They expect the demand to increase further.
“We believe that there is yet to be an increase in the utilization of working capital,” Chadha said. “For us, it is still in the 55-60% range. There is still upside for corporate debt To move on from here.”
According to RBI data, credit to industry grew by 12.6% in September 2022 as compared to a growth of 1.7% a year ago. Notably, debt to large industry increased to 7.9% in September 2021 as against a contraction of 2.1%.
Bankers expect a further pick-up in corporate credit in the remaining two quarters of the current fiscal.
The company’s chairman Dinesh Khara said, “The capacity utilization has improved and we are confident with the kind of demand we have seen on the ground. state Bank of India, “We are seeing demand related to capex and there are signs of improvement in capacity utilization.”
The largest Indian lender has a loan pipeline of ₹2.4 lakh crore and sees demand from sectors such as infrastructure, services, power, renewable energy and oil marketing companies.
According to an RBI survey, the seasonally adjusted capacity utilization of the manufacturing sector increased from 73% in the March 2022 quarter to 74.3% in the June quarter, its highest level in three years.
relieving plan
“We believe India Inc., having gone through a deleveraging phase over the past few years, is now in a better position to start deleveraging,” said analyst Kunal Shah. ICICI Securities,
“Revival in consumer demand (and) growth in private capexIncrease in government spending, thereafter, could be the trigger for industry credit growth and these could become the major catalyst for overall credit growth revival,” he said. “Noting that industry accounts for more than 25% of total non-food credit. The pace of growth in the industry could become an incremental delta for overall non-food credit pick-up.”