Corp Loans in Slow Lane as Cos Switch to Bonds, Stock Sales

Indian companies borrowed less from banks in FY25 and turned instead to alternate fundraising sources such as corporate bonds and equity, showed recent data released by the Reserve Bank of India (RBI).

- Shayan Ghosh

Bank loans, which are typically the biggest source of corporate funding, fell 16% year-on-year (y-o-y) to ₹17.9 trillion in FY25. Alongside, equity issuances took off, with non-financial companies raising ₹3.8 trillion, against ₹1.4 trillion in FY24.

While domestic non-bank sources saw 35% growth, foreign sources of funding witnessed 33.5% growth in FY25.

That apart, corporate bond issuances by non-financial companies rose 18% to ₹1.9 trillion in FY25.

However, overall money raised by companies in FY25—₹35 trillion—grew at 3%, the slowest pace in five years, compared with 17-34% growth in the past four years, according to the central bank's data.