Indian Companies Debt Growth Slowed in Last Five Years, Says BoB Report

Debt growth of Indian companies has slowed down over the past five years, suggesting that they are using internal accruals for growth, noted a research report by Bank of Baroda.

- TDG NETWORK

The report showed that the debt of non-financial corporates rose from Rs 20.7 lakh crore in FY21 to Rs 22.6 lakh crore in FY25. This reflects a compound annual growth rate (CAGR) of 2.9 per cent, which is significantly lower than the 8.7 per cent CAGR recorded during the previous five-year period between FY15 and FY20.

The report stated, "Growth in debt in the five years ending FY25 was slower than that in the preceding five-year period".

The report also noted that the trend in debt growth has varied across the five-year period. Debt grew by 5.9 per cent in FY21 and 5.7 per cent in FY23.