Rapid increase in corporate loans due to revival of capital investment

New capital investment by companies is clearly picking up, and bank lending demand is infrastructure, road, Renewable energyWhen oil sector.
Lending demand in past quarters was driven by higher working capital utilization due to rising commodity prices, but since the September quarter, corporate lending growth has trended toward new capacity building, he said. A banker told ET.
“In our case, most of the company growth has been investment driven,” he said. It comes from the fact that we have significantly deleveraged at
He expects demand to grow further.

“We believe the increase in working capital utilization will continue,” said Mr Chadha. “For us, it’s still in the 55-60% range. Corporate loan for future growth. “
According to RBI data, confidence in the industry increased by 12.6% in September 2022. Notably, his credit to large industries accelerated to 7.9% against his 2.1% contraction in September 2021.

Bankers expect business lending to pick up further momentum in the remaining two quarters of the fiscal year.
Chairman Dinesh Khara said: “We are seeing capital investment related demand and capacity utilization is showing signs of improvement.”
India’s largest lender has a Rs 24 lakh term loan pipeline and sees demand from sectors such as infrastructure, services, power, renewable energy and oil marketing firms.
Seasonally adjusted manufacturing capacity utilization improved from 73% in the March quarter 2022 to 74.3% in the June quarter, the highest level in three years, according to RBI research.
re-leverage plan

Analyst Kunal Shah said:
“A recovery in consumer demand (and) an increase in personal demand capital investment, the ensuing increase in government spending could trigger credit growth in the industry, and these could be major catalysts for an overall recovery in credit growth,” he said. “Given that the industry accounts for more than 25% of all non-food credits, the pace of growth in the industry could be an incremental delta in pickups for all non-food credits.”

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